Annual Report Sony 2019 PDF

2019
Annual Report
April 1, 2018–March 31, 2019
Contents
1 Introduction 52 Corporate Section

1 Sony Financial Group s Mission, 52 Corporate Profile
Vision & Values 53 Profiles of Group Companies
2 History 54 Stock Information
4 Financial and Non-financial Highlights
6 Message from the President 56 Reference Materials
11 Sustainability Initiatives 56 Review of Operations / Organizational
Chart of Business Operations
12 Strategy and Review 57 Financial Highlights
12 Sony Financial Group 58 SFH Consolidated Financial Statements
16 Sony Life 66 Segment Information
20 Sony Assurance 68 Other Financial Data
24 Sony Bank 70 Relationship with Parent Company,
28 Nursing Care Business Sony Corporation
71 Financial Data Book Contents
30 Initiatives to Strengthen 72 Glossary
Our Foundation for Creating Value
30 Corporate Governance
48 Human Resources
50 The Environment
51 Communication with Stakeholders
Editorial Policy
SFH refers to Guidance for Collaborative Value Disclaimer

Creation published by the Ministry of Economy, This annual report contains statements concerning the current plans, expectations,
Trade and Industry when organizing and examining strategies and beliefs of the SFG. Any statements contained herein that are not historical
matters to be listed in this report, in order to facts are forward-looking statements or pro forma information. Forward-looking statements
may include̶but are not limited to̶words such as believe, anticipate, plan, strategy,
make this report a starting point for dialogue with expect, assume, forecast, predict, propose, intend and possibility that describe
shareholders and investors. future operating activities, business performance, events or conditions. Forward-looking
statements, whether spoken or written, may also be included in other materials released
to the public. These forward-looking statements and pro forma information are based on
assumptions, decisions and judgments made by the management of SFG companies, and
are based on information that is currently available to them. As such, they are subject to
Company Name Abbreviations various risks and uncertainties, and actual business results may vary substantially from the
The following abbreviations for company names are used in this report. forecasts expressed or implied in forward-looking statements. Consequently, investors are
cautioned not to place undue reliance on forward-looking statements. SFG companies are
Sony Financial Group …………………………………… SFG under no obligation to revise forward-looking statements or pro forma information in light
Sony Financial Holdings Inc. …………………………… SFH of new information, future events or other findings. The information contained in this annual
Sony Life Insurance Co., Ltd. ………………………… Sony Life report does not constitute or form part of any offer for sale or subscription of or solicitation
AEGON Sony Life Insurance Co., Ltd. ……………… AEGON Sony Life Insurance or invitation of any offer to buy or subscribe to any securities, nor shall it or any part of it
form the basis of or be relied on in connection with any contract or commitment whatsoever
SA Reinsurance Ltd ……………………………………… SA Reinsurance
in Japan or abroad.
Sony Life Business Partners Co., Ltd. ……………… Sony Life Business Partners
Sony Assurance Inc. ……………………………………… Sony Assurance
Other Disclaimers
Sony Bank Inc. …………………………………………… Sony Bank
The SFG refers to the financial group that comprises SFH, Sony Life, Sony Assurance,
Sony Payment Services Inc. …………………………… Sony Payment Services Sony Bank, Sony Lifecare, Sony Financial Ventures, as well as their subsidiaries and
SmartLink Network Hong Kong Limited …………… SmartLink Network Hong Kong affiliates.
Sony Lifecare Inc. ………………………………………… Sony Lifecare Unless otherwise indicated, figures less than the indicated unit in this material have been
Lifecare Design Inc. ……………………………………… Lifecare Design truncated, while ratios and percentage changes have been rounded off.
Lifeplanner and Karte are registered trademarks of Sony Life, SURE and ZiPPi are
Proud Life Inc. ……………………………………………… Proud Life
registered trademarks of Sony Assurance, MONEYKit is a registered trademark of Sony
Sony Financial Ventures Inc. …………………………… Sony Financial Ventures Bank, and Sony Bank GATE is a registered trademark of Sony Corp. Company names
Sony Corporation ………………………………………… Sony Corp. and product names that appear in this report, other than those mentioned above, are
trademarks or registered trademarks of the respective company.
Fiscal 1996–fiscal 2020 represent the fiscal years ended/ending March 31, 1997–2021.
c Sony Financial Holdings Inc. Annual Report 2019

Sony Financial Group s Mission, Vision & Values
Mission
Create a sustainable society where people feel a sense of enrichment
Vision
Become the most trusted financial services group by invoking

emotion through the power of technology and high-value-added
products and services that meet every customer s needs
Values
Customer First: Provide products and services that satisfy customers

by listening sincerely to their views
Originality: Work actively and pursue creativity and innovation

within an organization that supports a spirit of freedom
and open-mindedness
Integrity & Fairness: Act fairly with high ethical standards and a sense of
purpose
Diversity: Create new value by harnessing diversity and varying

viewpoints
Sustainability: Fulfill our stakeholder responsibilities through

disciplined business practices
Sony Financial Group formulated its Mission, Vision & Values.

Sony Financial Holdings Inc. formulated a new corporate philosophy named Mission, Vision & Values on
April 1, 2019, with the aim of the entire group working together to further enhance corporate value and
make broad-ranging contributions to society.
P6 Message from the President
Sony Financial Holdings Inc. Annual Report 2019 1

Introduction History
It all began with the founder s dream

for Sony to have a financial institution
Akio Morita, the founder of Sony Corporation, visited Chicago in the late 1950s to open a sales office for
transistor radios. He was shocked to discover that the massive skyscraper towering over the streets was occu-
pied by the largest life insurance company in America at that time. This is said to be the inspiration of his dream
for Sony Group to have its own financial institution and to build a magnificent skyscraper of its own one day.
His entrepreneurial spirit drove him to adapt to the diversifying needs of customers and solve the problems
facing society himself. The Sony Spirit to do what has never been done before has been passed down from
one generation to the next, and the Sony Group has taken advantage of financial liberalization and deregulation
to create a new financial business without being constrained by existing frameworks.
Sony Assurance
Challenge for a new business model for non-life insurance
that Connects directly with customers
Backed by the liberalization of the market through deregulation in the late 1990s that came be
known as the Financial Big Bang, as well as the spread of the Internet, Sony Assurance
launched a new business that allows customers to apply for insurance directly online or over the
phone. Indeed, Sony Assurance has become a leading company in direct automobile insurance
with automobile insurance whose premiums change depending on the customer s car life, such
as how far they drive. Furthermore, Sony Assurance has developed other products and services,
and continues to grow.
Sony Life
Accompanying and protecting customers all across Japan
through life s milestones
Sony Life has created a unique business model in which it provides tailor-made life insurance
customized to each customer s needs through advanced consultation. Lifeplanner sales
employees and Partners build trust by Accompanying customers through life s milestones,
ensuring steady growth for Sony Life.
1979
「ソニー・プルデンシャル生命保険株式会社」
Sony Prudential Life Insurance Co., Ltd.,
（ソニー生命）設立
is established (currently Sony Life)
1990
1946
東京通信工業株式会社（ソニー
Tokyo Tsushin Kogyo K.K. is㈱）設立
established
(currently Sony Corporation) 1989
1980 日経平均株価が史上最高値
Nikkei Stock Average
reaches円を記録
38,915 historic high of
¥38,915
1970 1977
日本人の平均寿命、男女ともに世界一
Japan achieves the longest life expectancy in the
world for both men and women
1940
2 Sony Financial Holdings Inc. Annual Report 2019

Sony Financial Holdings
Continuing to change finance in the future
Sony Financial Holdings Inc. is established in 2004 as the first financial holding company in Japan
with insurance companies and a bank among its holdings. In 2007, SFH was listed on the First
Section of the Tokyo Stock Exchange, and since then it has also entered the nursing care and
venture capital businesses.
Today, nearly 60 years since Akio Morita first saw his dream, Sony Financial Group s financial
business has become a major contributor to Sony Group s total profits. Sony Financial Group will
continue to provide high value-added products and services that break down preconceptions in
the finance industry, as a challenger and innovator in the industry that carries on the Sony Spirit.
Sony Bank
Freeing banking transactions from the constraints of time
and space
Sony Bank has launched revolutionary products and services faster than anyone else, including
mortgage loans that can be taken out without going to a bank, and foreign currency deposits that
can be traded at a reasonable cost from home via the Internet. Sony Bank has also assembled an
array of unique and convenient services, such as the ability to withdraw foreign currency savings
from partner ATMs overseas in cash and use the currency for shopping, and has expanded its
balance of foreign currency deposits closely behind the megabanks.
2014
1998 「ソニー・ライフケア株式会社」設立
Sony Lifecare Inc. is established
「ソニーインシュアランスプランニング株式会社」（ソニー損保）設立
Sony Insurance Planning Co., Ltd., is established
(currently Sony Assurance) 2018
2001 「ソニーフィナンシャルベンチャーズ
Sony Financial Ventures Inc. is
2001
「ソニー銀行株式会社」設立株式会社」設立
established
Sony Bank Inc. is established
2004
2004
「ソニーフィナンシャルホールディングス株式会社」設立
Sony Financial Holdings Inc. is established
（(2007 東京証券取引所市場第一
2007SFH 部上場）
is listed on the First Section of Tokyo
Stock Exchange)
2010
2011
Occurrence of the Great East
2000 Japan Earthquake
2012
Economic policies enacted by the
second Abe administration (Abenomics)
2007
Enactment of the Financial
Instruments and Exchange Act
Late 1990s -
Internet spreads with release of Windows 95
2008
Financial Big Bang occurs in Japan
Collapse of Lehman Brothers
2016
Introduction of negative interest
2000 rates
1996 Enactment of the nursing care Full enactment of revisions to the
insurance system Insurance Business Act
Revision to the Insurance Business Act ・Comparative recommendation
・Ban removed on mutual entry into life Removal of ban on companies from regulations
other industries entering the banking
and non-life insurance fields 2010 ・Fulfillment of obligation to grasp
industry
・Reviewed accounting calculation intentions
system Enactment of the
・Introduced product/rate notification 2001 Insurance Act
system Removal of ban on sales of insurance
products at banks
1997 Revision to the Banking Act (removal of ban
Licensed to offer risk-segmented on companies from other industries entering
automobile insurance the banking industry)
1998
Revision to the Act on Non-life Insurance Rating Organization
of Japan (Introduction of reference loss cost rates system)

Introduction Financial and Non-financial Highlights
Financial Highlights
Business Volume KPI

Sony Life (non-consolidated) Sony Assurance Sony Bank (non-consolidated)
Policy amount in force*1 Direct premiums written Retail balance*2

(Trillions of yen)
47.2
49.5 (Billions of yen)
112.1
(Trillions of yen)
4.2
45.3 107.0
43.1 99.0 3.9
40.9 94.3 3.6
90.4
3.2
3.0
2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019
*As of March 31, *For the years ended March 31, *As of March 31,
*1 Sum of individual life insurance and *2 Sum of deposits, investment trusts, and
individual annuities personal loans.
Since March 31, 2018, also includes
financial products intermediary services
and mediated discretionary investment
contracts.
Financial Soundness Indicators

Sony Life (non-consolidated) Sony Assurance Sony Bank (non-consolidated)
Solvency margin ratio Solvency margin ratio Capital adequacy ratio

(Domestic standard)
2,590.5% 813.0% 9.58%

Profitability Indicators
Sony Financial Holdings Sonly Life Sony Assurance Sony Bank
(consolidated) (non-consolidated) (consolidated)
Consolidated adjusted ROE Core ROEV Adjusted ROE ROE
6.7% 6.4% 15.2% 7.3%

Credit Ratings
Credit Rating Agencies Sony Financial Holdings Sony Life Sony Bank
Insurance claims
Issuer rating
Rating and Investment Information (R&I) paying ability ー
AA-
AA
Long-term issuer rating

Japan Credit Rating Agency (JCR) ーー
AA-
Insurer financial Counterparty credit rating

S&P Global Ratings (S&P) ー strength rating Long-term A
A+ Short-term A-1
*As of June 25, 2019
Non-financial Highlights
Number of Lifeplanner
Number of employees sales employees
Consolidated 11,055 Sony Life

(non-consolidated) 5,164
Life insurance business 8,454
Non-life insurance business 1,303
Banking business 609 Number of MDRT members
Others 623
Parent 66 Sony Life
(non-consolidated) 997
*As of April 1, 2019

Message from the President
Shigeru Ishii
President,
Representative Director

Aiming for steady growth of existing businesses
and growth beyond the scope of these
businesses, in order to respond to the needs and
rising expectations of the people and society, and
contribute to the development of a sustainable
society where people feel a sense of enrichment
Let me express my deepest appreciation to all stakeholders for

the continued support and interest you have extended to the Sony
Financial Group (SFG). Now that we have entered the second year
of our medium-term business plan, I would like to convey again our
thoughts on the medium-term plan, the new corporate philosophy
SFG formulated in April of this year Mission, Vision & Values , and
the purpose of renewing our management structure in June.
Environmental changes that reshape

the world
At present, environmental change is accelerating and advancing

dramatically in qualitative aspects, so we expect in another 10 years
the world will be an entirely different place. Looking back at the past
decade, many environmental changes have occurred, for example,
various technological advances have affected our lives, and demo-
graphic changes such as family compsition have changed. SFG has
provided new services that take into consideration the diversifying
needs of customers even with the stagnant market. As a result, Sony
Life has steadily increased its policies in force and increased its share
of the life insurance market. Sony Assurance has also continued to
grow as a leader in direct automobile insurance. In addition, Sony
Bank now trails closely behind the megabanks in Japan in the market
for individual foreign currency deposits, and has steadily increased its
number of mortgage loans. Indeed, SFG companies have achieved an
adequately strong presence among existing players in these markets.
However, it would be overly optimistic for us to forecast that our
future will remain on the same trajectory of business development
as in the past. Companies will be affected by not only technological
advances and changes in population trends, but also changes in the
economic environment such as continued long-term slow growth.
Changes in expectations for financial services represented by cus-
tomer-first business operations will also challenge the conventional
ways that financial services and companies are managed.

Financial services are no longer provided only by traditional financial
institutions, with players other than banks appearing in the field of
settlements, for example. Providing new value is essential in order to
survive in the harsh new world where any industry can be disrupt-
ed. Providing added value based on technology is the way for us to
achieve further growth. In the past, we found a way to provide exist-
ing financial services in a more streamlined manner and entered in the
markets for respective businesses. Once more, by providing new val-
ue that customers can really feel, we hope to achieve our next great
success and achieve sustainable growth.
Two challenges
Based on this idea, our medium-term business plan foresees changes

in the next 10 years, uses the first three years to prepare, and con-
siders which challenges to take on and how to implement this. We
believe that the hurdles SFG must clear in order to achieve sustain-
able growth are that we must undertake two challenges of differing
natures. For existing businesses, we must improve our current oper-
ations and further refine them so that they are more in line with cus-
tomers needs. Simultaneously, we will use the assets of our existing
businesses to adapt to environmental changes and provide new value
that does not lie on an extension of our present trajectory. In essence,
this means accepting and expanding upon divergent ideas.
In order for our existing businesses to continue growth according
to their potential, we must achieve steady growth by increasing the
degree of freedom with which each company may act, and also aim
for growth beyond the scope of our existing businesses in response
to environmental changes. It is our intent to provide services that ex-
ceed customers expectations by making full use of the Sony Group s
technology, without confining ourselves to our past achievements.
As a specific move in our medium-term business plan, we have
established Sony Financial Ventures in 2018, which will be responsible
for our venture capital business. We will strengthen our existing busi-
nesses in SFG companies and create new high value-added financial
services by investing in, and promoting partnership and collaboration
with, venture companies that have unique strengths in new move-
ments in the financial field such as Fintech. By developing our venture
capital business, we will be able to access the frontlines of Fintech,
which is a footing we must absolutely hold now as a financial institu-
tion. I consider it essential for us to not only have a deep knowledge
of the field on the frontlines, but also be able to act taking into consid-
eration the possibility of collaboration from an early stage.

Message from the President
Building a stronger foundation for

management
It is also necessary for us to have a solid promotion and management

system in order to carry out the reforms I have described above. To
do so, it is crucial that we strengthen our governance. Our stakehold-
ers are also strongly requesting that we make this change. There-
fore, SFG has strengthened its governance system in order to build
a better foundation for taking on the two challenges of growing our
existing businesses and growing beyond the scope of our existing
businesses by executing reforms. Specifically, we reviewed structure
of SFH s Board of Directors with the purpose of separating supervision
and execution. We received an approval at our most recent General
Meeting of Shareholders to restructure the Board of Directors so that
it consists of 10 members, four of whom are outside directors, three
of whom are from Sony Corporation which holds approximately 65%
of shares in SFH, and three of whom are executive directors of SFH.
Until June, the presidents of our major subsidiaries have concur-
rently served as Directors of SFH to ensure efficiency. However, in
order to adapt to the harsh environment we are in, we decided that
it would be better for them to concentrate more on the execution of
their respective businesses.

Sustainability and the pursuit of the original
will of SFG
The theme of our current medium-term business plan is to take on

the challenge of new growth. As we aim for the next opportunity
for growth, SFH must create sustainable value in the long term. As
part of that, we returned to the original will and reviewed the position-
ing of SFG, which now operates a wide range of businesses including
life insurance, non-life insurance, banking, and nursing care. Based
on the desire for our stakeholders to feel a sense of enrichment and
contribute to the creation of a sustainable society, we have identified
the Group s Mission and Vision, so that all of the Group employees
who are involved in our various businesses can move forward to-
gether in a common direction, and have also formulated the Group s
Values, which are treasured by each employee.
We recognize that SFG is expected to provide high-value-added
products and services, as stated in our Vision. While the urgency of
applying reforms to our business style is growing, the services we
have provided from our origin, to work for the customer, will contin-
ue to be in demand as long as people go about their daily lives. We
will contribute to society by providing the best possible services to
customers, fulfilling the essential needs of people and society, and
meeting their expectations for services that would be nice to have. In
doing so, I believe that we can realize sustainable growth, make our
stakeholders feel a sense of enrichment, and build fruitful win-win rela-
tionships with each of our stakeholders. We will do our best to make
this happen.
We look forward to your continued support and interest in our
efforts.

Sustainability Initiatives
SFG aims to improve its corporate value and contribute to the development of a sustainable society by pro-
moting management from a long-term perspective and continuously producing economic value and social
value through corporate activities that are highly aware of customer-first approaches and response to
changes. We consider it essential to achieve deeper engagement with customers, employees, shareholders,
and other stakeholders.
Contributing toward the development of a sustainable society
Customer-first
Economic Social
value value Stakeholders
Response to changes
Corporate activities Enhance corporate value
Based on this idea, we aim to create a value in such forms as offering lifestyles that feature safety and peace
of mind, contributing to a healthy, long-lived society, and making lifestyles more convenient, and we will
strive to strengthen the foundation of our value creation, such as human resource development, respect for
diversity, and strengthening governance.
Initiatives to create value through our business
Contribute to people s lives by offering

appropriate advice
Propose products to match individual needs Value Creation
Encourage asset creation/investment, and
promote health
Contribute to a society featuring next- Offer lifestyles that feature safety
generation mobility
Improve access to financial services
and peace of mind
Foster financial innovation
P12 Strategy and Review Contribute to a healthy,
long-lived society
Initiatives to strengthen our foundation for
creating value
Support challenges oriented toward new Make lifestyles more convenient

growth
Create an employee-friendly working
environment
Promote empowerment of diverse human
resources
Strengthen governance
Operate environmentally-considerate
businesses
P30 Initiatives to Strengthen Our Foundation
for Creating Value
P1 Sony Financial Group s Mission, Vision & Values

Strategy and Review
Sony Financial Group
Sony Financial Group Medium-term Business Plan: Fiscal 2018 Fiscal 2020
Under the theme of taking on the challenge of new growth:
- achieve organic growth from existing business models
Theme
- make strategic moves from a long-term perspective to secure further growth,
taking full advantage of changes 10 years into the future
Response to Changes
Customer-first Establish a foundation that allows us to take
Points Further promote the customer-first full advantage of changes (technological
business operation advancements, social or regulatory changes,
etc.) to secure further growth

Group s Growth Strategy
In our medium-term business plan, in addition to organic growth achieved

by strengthening our existing businesses, we will take on new initiatives
such as utilizing Fintech and establishment of investment subsidiary.
Strategy and Review

Organic Growth through Stronger Existing Businesses
Non-life
Life insurance insurance Banking Nursing care
business business business business
P16 Sony Life P20 Sony P24 Sony Bank P28 Nursing
Assurance Care Business
IInitiatives to Strengthen Our Foundation

Shigeru Ishii
President, Representative Director,
New Initiatives Aimed at Further Growth Sony Financial Holdings
for Creating Value

Utilization of Fintech
With regard to the utilization of Fintech, SFG companies are engaged in development with the aim of providing
higher quality financial services more effectively and efficiently to customers. In addition to services that have al-
ready been implemented, SFG as a whole is promoting initiatives to realize more advanced services.
In addition, by further strengthening our collaboration with the Sony Group, SFG will develop better products
and services, from both the business and technical side of our operations, which will lead to an enhancement of
our competitive advantage.
Establishment of investment subsidiary

Sony Financial Ventures Inc. was established in July 2018, and Sony Financial Ventures jointly launched a ¥5 billion
Corporate Section
fund with Global Brain Corporation, one of the largest independent venture capital firms in Japan, in October 2018.
Sony Financial Ventures will invest in venture companies that have strengths in fields such as Fintech and engage in
collaboration between venture companies and SFG in order to strengthen SFG s existing businesses and create new
businesses.
Progress Toward Fiscal 2020 Medium-term Targets
Progress toward
FY2018 FY2019 FY2020
FY2020 Medium-term
Reference Materials
Actual Forecast Medium-term targets*1

targets
Almost
Ordinary revenues ¥1.62 trillion ¥1.69 trillion ¥1.76 trillion in line
Above initial
Ordinary profit ¥93.8 billion ¥98 billion ¥77 billion target
Profit attributable to owners Above initial

¥62 billion ¥65 billion ¥50 billion
of the parent target
Almost
US-GAAP operating income ¥161.5 billion ¥170 billion ¥180 billion in line
Almost
Consolidated adjusted ROE*2 6.7% Approx. 6% Approx. 7% in line
*1 Medium-term targets announced on May 31, 2018

*2 Fiscal 2018 Actual and fiscal 2019 Forecast are based on interest rate levels as of March 31, 2019
Fiscal 2020 medium-term target is based on interest rate levels as of March 31, 2018

Strategy and Review
Consolidated Adjusted ROE
Since each company of SFG differs by industry such as insurance and banking, each Group company calculates
its Adjusted ROE based on adjusted profit and adjusted capital to realize its corporate value and capital efficien-
cy. By fiscal 2020, as the medium-term target, Sony Life s core ROEV to be 6% or more. For Sony Assurance,
adjusted ROE to be reach around 13% by that time, while Sony Bank to be show ROE of 6.8%. On a consolidated
basis, achievement of these medium-term targets will lead to a consolidated adjusted ROE of about 7%.
FY2020 Medium-term
FY2018 Actual FY2019 Forecast
targets*
Consolidated adjusted ROE 6.7% Approx. 6% Approx. 7%
(Sone Life) Core ROEV 6.4% 5% – 6% 6% or more
(Sony Assurance) Adjusted ROE 15.2% Approx. 14% Approx. 13%
(Sony Bank) ROE 7.3% 6.4% 6.8%

* Medium-term targets announced on May 31, 2018
Calculation of Consolidated Adjusted ROE

Group companies adjusted ROE and ROE as well as consolidated adjusted ROE are presented below.
Calculation of Sony Life s core ROEV:
New business value ＋ Expected existing business contribution
MCEV*1 as of the beginning of the fiscal year less dividends paid plus MCEV*1 as of the end of the fiscal year, divided by two
Calculation of Sony Assurance s adjusted ROE:
Net income (loss)＋Provision amount for catastrophe reserve and its provision amount for reserve for price fluctuations, in each case after taxes
The average amount of net assets plus the sum of catastrophe reserve and its reserve for price fluctuations during the fiscal year, in each case after taxes
Calculation of Sony Bank s ROE:
Profit (loss) attributable to owners of the parent
The average amount of net assets during the fiscal year
Calculation of Consolidated adjusted ROE for fiscal 2018:
Consolidated adjusted ROE = Consolidated adjusted profit ÷ consolidated adjusted capital
Sony Life: New business value + expected existing business contribution + Sony Assurance: Net income (loss) + provision amount for catastrophe
reserve and its provision amount for reserve for price fluctuations, in each case after taxes + Sony Bank: Profit (loss) attributable to owners of the parent
Sony Life: MCEV*1 as of the beginning of the fiscal year less dividends paid plus MCEV*1as of the end of the fiscal year, divided by two
+ Sony Assurance: The average amount of net assets plus the sum of catastrophe reserve and its reserve for price fluctuations during the fiscal year,
in each case after taxes + Sony Bank: The average amount of net assets during the fiscal year
*1 Sony Life discloses Market Consistent Embedded Value ( MCEV ). Sony Life s MCEV is calculated in compliance with the European Insurance CFO
Forum Market Consistent Embedded Value Principles©*2( MCEV Principles ), the international standard in disclosing MCEV published by the CFO
Forum comprising CFOs from major insurance companies in Europe.
*2 Copyright© Stichting CFO Forum Foundation 2008
Basic Policy on Returning Profits to Shareholders
Medium-term Dividend Policy

SFH aims for steady increases in dividends in line with earnings growth over the medium to long term, while secur-
ing sufficient internal reserves to ensure the financial soundness of Group companies and to invest in growth fields.
Management will examine earnings growth over the medium to long term by placing more importance on eco-
nomic value-based profit indicators that are more suitable for evaluating the growth of the life insurance business,
in addition to statutory profit. Furthermore, management will determine specific dividend amounts for each year by
taking into account a comprehensive range of factors surrounding SFG.
Dividend Forecast
With regard to its medium-term dividend policy, SFH places more importance on consolidated adjusted ROE as
an indicator for measuring the growth of economic value-based profit that are more suitable for valuing the growth
of the life insurance business. If it could be expected this level to be stably at a level of 5% or more over the me-
dium-term, then we will determine the amount of increased dividends, based on a comprehensive judgment.
Consolidated adjusted ROE for fiscal 2018 was 6.7%, and is expected to be approximately 6% in fiscal 2019. For
fiscal 2019, after considering the business environment, the expansion of the Group s business volume, and the
level of economic value-based profit growth, we forecast dividends of ¥65 per share, an increase of ¥2.5 from
dividends for fiscal 2018.

Strengthening Group Governance
In order to strengthen our governance and improve our sustainable corporate value, we have changed the struc-
ture of the Board of Directors of SFH.
P38 Transition to a New Management Structure (Change in the Composition of the Board of Directors)
Strategy and Review

Customer-first Business Operation Policy (Summary)
Based on its vision and philosophy, SFG pursues business operations from a customer-first perspective. SFH has
clarified this initiative as its customer-first business operation policy, and Sony Life, Sony Assurance and Sony Bank
will each go further to establish business operation policies fine-tuned to respective activities.
The policy that SFH has set as well as the policies in place at Group companies will be reviewed periodically,
taking into account such factors as changes in the operating environment. In addition, SFH, as a financial holding

company, will confirm that the content of the customer-first business operation policy is appropriate, and will mon-
itor the activities at Group companies, based on their policies, to ensure proper business operations. SFH will offer
whatever support and guidance is necessary, as required.
for Creating Value

At the same time, Group companies will verify the status of their own initiatives on customer-first business
operations and regularly report to the Board of Directors or other oversight structures and will also provide status
updates on a regular basis.
Group ERM*
A group-oriented ERM (Enterprise Risk Management) framework has been introduced into SFG. It aims to balance
and optimize capital, risk and return by extending comprehensive risk management structures already in place at
Corporate Section
each company throughout the whole organization and to instill the idea of improved capital efficiency in manage-
ment across the Group. This ERM framework will help SFG achieve stable growth and maximize medium- to long-
term corporate value. The Group is working to build a PDCA cycle through the formulation, implementation and
monitoring of business plans based on risk appetite. Furthermore, we are trying to raise Group ERM even higher
while keeping related regulatory trends in sight.
ERM Diagram Operation Cycle of Group ERM
Return Set risk-taking policy and risk tolerance

(risk appetite)
Reference Materials
Establish business plan (measures and

Capital efficiency strategies, revenue plan, stress tests, etc.)
(profitability)
Capital policy Operate business and execute measures
Dividend policy
Manage progress and track status through
monitoring
Take necessary measures according to
Capital Soundness Risk changes in soundness and profitability
Capital Sony Life: Core ROEV Insurance business: Solvency margin ratio
efficiency Soundness
Sony Assurance: Adjusted ROE Banking business: Capital adequacy ratio
(profitability) indicators
indicators Sony Bank: ROE Management on a regulatory basis and on the basis of economic value

Strategy and Review
Sony Life Life insurance business
Accompanying and protecting customers all across Japan through life s milestones
Ordinary
Revenues Ordinary Profit
Composition by Business
Segment Approx. 90 % Approx. 83%

In August 2019, Sony Life celebrates the 40th anniversary of its establish-
ment. I would like to take this opportunity to express my gratitude to all
the stakeholders including customers who have extended their support
and understanding to us over the years. Since we started operations, we
have advanced various initiatives in order to provide the most suitable
coverage to as many customers as possible via consulting sales and fol-
low-up. Our policy amount in force is approaching ¥50 trillion, which epit-
Strategy and Review

omizes our customers collective sentiments, and for Sony Life, a proof
of the trust they place in us. Moving forward, we will continue to conduct
business while putting the customer first, and achieve steady growth.
Tomoo Hagimoto
President, Representative
Director
Sony Life Insurance Co., Ltd.

Main products: Death protection insurance (term life insurance, U.S. dollar-denominated insur-
for Creating Value

ance, variable life insurance), living benefit insurance, educational endowment insurance, medical
Traits
insurance
Main sales channels: Lifeplanner sales employees, partners (independent agencies)
Tailor-made insurance product design and sales approach that match life planning of each
individual customer based on consulting (consulting sales)
Strengths Maintaining optimal coverage through inspections of and advice on post-contract life plans and
Corporate Section
coverage, adjusted to changes in environment surrounding the customer (consulting follow-up)
Securing financial soundness through ALM operation adjusted to long-term liability characteristics
Policy amount in force*1

: Sony Life : Life insurance industry : Sony Life s market share
5.2% Reference Materials
¥49.5trillion
CAGR＊2 4∼5%
March 31, March 31,
2001 2019
*1 Sum of individual life insurance and individual annuities

*2 CAGR: Compound Annual Growth Rate

Strategy and Review
Sony Life
Review of Results for Fiscal 2018
In order to realize our vision to protect customers all across Japan throughout their lives, Sony Life has worked
to provide necessary coverage to customers through consulting sales, and inspect and optimize coverage through
consulting follow-up.
Products
In addition to enhanced protection, launched two new types of medical insurance; one with affordable premiums
and the other with health refund benefit payments, in July 2018
Service
Expanded the scope of handling simple claims for hospitalization benefits and surgery benefits in December 2018
Other
Started providing Sony Life s U.S. dollar-denominated insurance through sales staff of Sumitomo Life through busi-
ness partnership in January 2019
Established Sony Life Business Partners Co., Ltd., a special subsidiary company, as an initiative to promote the
employment of people with disabilities in March 2019
Trends of Key Indicators
Policy Amount in Force*1 Number of Lifeplanner MCEV*3/Core ROEV*4 Ordinary Profit

Trillions of yen
sales employees*2 : MCEV (trillions of yen)
(Life Insurance Business)
: Core ROEV (%) Billions of yen
6.4 78.2
47
49 5,142 5,164 5.9
45 4,933
56.8 54.1
3.6
1.6 1.7
1.4
March 31, March 31, March 31, FY2016 FY2017 FY2018 FY2016 FY2017 FY2018 FY2016 FY2017 FY2018
2017 2018 2019
*1 Sum of individual life insurance and individual annuities

*2 The figure includes the number of contracted Lifeplanner sales employees and those rehired on a fixed-term contract basis after retirement
*3 Results for fiscal 2016 exclude impact from revisions in the insurance risk measurement method and others
*4 Results for fiscal 2016 and fiscal 2017 exclude impact from revisions in the insurance risk measurement method and others
Examples of Value Creation through Business
Sony Life has worked to provide customers with necessary coverage and keep their coverage in an optimal state
through consulting sales and follow-up conducted by Lifeplanner sales employees. In order to enhance our pro-
vided value in the future, we will improve the quality and proposal skills of our Lifeplanner sales employees, and will
enhance our products and expand the scope of our coverage in anticipation of the increasing diversity and com-
plexity of our customers needs, due to environmental changes such as greater longevity.
Value creation
Offer lifestyles that feature safety and peace of mind Contribute to a healthy, long-lived society

Medium-term Business Plan (Fiscal 2018 – Fiscal 2020)
Pursue quality in the Lifeplanner channel

In addition to implementing a strict recruiting process, Sony Life will set a higher stan-
dard of service and provided value, and evaluate the behavior (processes) of Lifeplan-
Strategy and Review

ner sales employees based on that standard from multiple perspectives, in order to
Further improve quality even further. In addition, we will work to execute deeper consulting
strengthen sales and follow-up utilizing tools such as LiPSS and Karte.
our business We will further enhance the value provided by Lifeplanner sales employees by pursu-
foundation ing higher quality.
Achieve steady recovery in the independent agency channel

In addition to expanding support to fit the characteristics of our partners, we will
strengthen our relationship with high-quality partners by introducing a compensation

system that evaluates the quality of partners.
Customer-first
for Creating Value

Expand coverage
We will promote the enhancement of product capabilities and expand coverage,
Response to Changes
centered on death protection products. As our medium-term product strategy, we will

promote new product development in anticipation of environmental changes, such as
Provide new greater longevity.
value
Evolve customer-first service (Fintech)
We will develop tools that utilize life planning data and AI, and in both the consulting
sales and consulting follow-up phases, we will aim to support objective proposals to
the customers and improve quality of services.
Corporate Section
Realize growth in profit on the basis of economic value
Steadily grow
We will aim for medium-term profit growth on an economic value basis, while striving
corporate
to conduct customer-first business operations and strengthen our compliance
value
system.
Progress toward
Reference Materials
FY2018 FY2019 FY2020

FY2020
Actual Forecast Mid-term targets*1
Mid-term targets
Almost
Policy amount in force ¥49 trillion ¥52 trillion ¥55 trillion in line
Number of Lifeplanner sales Below initial

5,164 Around 5,300 Over 5,700
employees*2 target
MCEV*3 ¥1.7 trillion ¥1.7 trillion Over ¥1.8 trillion Almost

Core ROEV 6.4% 5% - 6% Over 6% in line
Ordinary profit Above initial

¥78.2 billion ¥84.2 billion ¥62 billion
(Life insurance business) target

*2 The figures include the number of contracted Lifeplanner sales employees and those rehired on a fixed-term contract basis after retirement
*3 Fiscal 2018 Actual and fiscal 2019 Forecast are based on interest rate levels as of March 31, 2019
Fiscal 2020 medium-term target is based on interest rate levels as of March 31, 2018

Strategy and Review
Sony Assurance Non-life insurance business
Challenge for a new business model for non-life insurance that connects directly with customers
Ordinary
Segment Approx. 7% Approx. 7%

While our mainstay automobile insurance market remained stable, the
share of direct automobile insurance in the market expanded, reaching
8%*1 of the industry premium income in fiscal 2017. Moving forward, more
customers will seek reasonable premiums and the convenience of the In-
ternet, so we expect the share of direct automobile insurance to increase
even higher. Since Sony Assurance reached No. 1*2 in sales in direct
automobile insurance in fiscal 2002, we have maintained our position as
Strategy and Review

the leading company. We will continue our endeavor to maximize custom-
er value through improvements in customer experience (CX) and further
expand our share of the automobile insurance market, while also strength-
ening various business developments including medical insurance, as well
as overseas travel insurance and fire insurance available exclusively online,
with the aim of sustainable growth.
*1: According to research by Sony Assurance using data officially disclosed by individual non-life insurers
*2: According to research by Sony Assurance using automobile insurance premium revenues of non-life Atsuo Niwa
insurers that sell automobile insurance primarily via direct sales channels, since fiscal 2002
President, Representative Director
Sony Assurance Inc.

for Creating Value
Direct insurance company for individuals
Traits Main products: Automobile insurance, medical insurance, overseas travel insurance, fire insurance
Main sales channel: Internet
Reasonable premiums according to each customer s risk

Strengths
High-quality accident response, customer center, and website services
Corporate Section
Automobile Insurance Market and Market Share of Direct Premiums Written (Automobile Insurance)
Major Direct Non-life Insurers by Major Direct Non-life Insurers
For the years ended March 31, For the years ended March 31,
: Direct premiums written (total of all non-life insurers and shown as the
automobile insurance market) (left scale: billions of yen) Billions of yen
: Market share of major direct non-life insurers (right scale: %)
5,000 10.0 100
Sony Assurance
4,000 8.0 80
3,000 6.0 60
A
Reference Materials
2,000 4.0 40
C E
B
D F
1,000 2.0 20
G
H
0 0.0 0
98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19
Note: The graph was prepared by Sony Assurance from data officially Note: The graph was prepared by Sony Assurance from data officially
disclosed by individual non-life insurers. disclosed by individual non-life insurers. Amounts for fiscal 2018 are
based on published data available up to June 26, 2019.

Strategy and Review
Sony Assurance
In addition to strengthening the product capability of our mainstay automobile insurance and medical insurance,
we have expanded our line of insurance products by starting to sell overseas travel insurance and fire insurance
available exclusively online. We have also worked to improve the quality of our products and service based on
customer feedback, from contract support offered through our website and customer center to accident resolution
services.
Products
Automobile insurance
Established the new ASV (Advanced Safety Vehicle) Discount on premiums for vehicles equipped with automatic
brakes for policies taken out in April 2018 or later.
Established the new Accident-free Discount which gives a ¥2,000 discount on premiums for customers who had no
rating-lowering accidents during their previous contract term, for policies taken out in April 2019 or later.
Medical insurance
Established a new plan with simple coverage to ensure that customers can enroll with affordable premiums in the
cancer-focused medical insurance SURE.
Expand the insurance lineup
Launched overseas travel insurance and fire insurance as new products available exclusively online.
Service
Implement improvement measures based on customer feedback
Shortened the time required to provide estimates via calls to our customer center.
Alleviated usage limits when customers have a dead battery in our road service.
Improve customer convenience using advanced technology
Started providing simple estimate with a photo automobile insurance service that displays estimated premiums on the
spot based on a photo of other companies insurance policies.

Direct premiums written Sum of two ratios*1 Ordinary profit/Adjusted Adjusted ROE
Billions of yen %
ordinary profit*2 %
: Ordinary profit (billions of yen)
112.1 : Adjusted ordinary profit
107.0
99.0 (billions of yen)
16.1
90.6 89.2 89.1 10.5 14.4 15.2
10.0
8.1
6.5 6.8
4.9
FY2016 FY2017 FY2018 FY2016 FY2017 FY2018 FY2016 FY2017 FY2018 FY2016 FY2017 FY2018
*1 Sum of two ratios = E.I. loss ratio + Net expense ratio

*2 Adjusted ordinary profit = Ordinary profit + Provision for catastrophe reserve
As a direct insurance company, Sony Assurance has proposed risk-segmented insurance directly to customers
and provided compensation that meets the needs of each individual customer since its founding. At present, we
are developing insurance products that contribute to safe driving support and accident prevention, with a focus on
PHYD-type telematics insurance. In addition, we aim to contribute to the next-generation mobility society through
continuous research in anticipation of social changes such as autonomous vehicles and MaaS*.
*MaaS (Mobility as a Service): The concept of a new form of mobility that seamlessly connects various forms of transportation other than the
user s personal car as a single service.
Value creation
Offer lifestyles that feature safety and peace of mind Make lifestyles more convenient

Continue to grow, While further improving our product capability and service quality, in order to
and expand share better appeal to customers, we will continue our initiatives to build trust and con-
of, automobile fidence in direct automobile insurance through effective marketing by improving
Strategy and Review

insurance our brand value.
Customer-first
Accelerate growth In 2018, we strengthened the product capability of medical insurance and
by expanding launched overseas travel insurance and fire insurance. In these categories, we
business will pursue business expansion by utilizing marketing expertise accumulated in
categories automobile insurance.
We will maintain our position as No. 1 non-life insurer for customer satisfaction

Response to Changes
Maximize
by promoting CX improvements and providing high quality service. Furthermore,
customer
we will pursue improved CX by combining service only people can provide with
value
for Creating Value

leading-edge technology.
In the areas of product development, marketing, contract processes, and cus-

Utilize technology tomer support, we will continue to actively utilize leading-edge technologies such
as Fintech to improve CX and operation efficiency.
Corporate Section
FY2018 FY2019 FY2020 Progress to FY2020
Actual Forecast Medium-term targets* Medium-term targets
Above initial
Direct premiums written ¥112.1 billion ¥119 billion ¥120 billion target
Sum of two ratios 89.1％ Almost

(E.I. loss ratio) 61.3％ Approx. 89％ 89％ in line
(Net expense ratio) 27.8％
Ordinary profit ¥6.8 billion ¥7 billion ¥7 billion Reference Materials
Above initial
Adjusted ordinary profit ¥10.5 billion ¥10.9 billion ¥11 billion target
Adjusted ROE 15.2％ Approx. 14％ Approx. 13％
* Medium-term targets announced on May 31, 2018.

Strategy and Review
Sony Bank Banking business
Freeing banking transactions from the constraints of time and space
Ordinary
Segment Approx. 3% Approx. 10%

As an Internet bank, Sony Bank has made the most of technology to con-
tinue growing since its inception. However, as online financial transactions
have become commonplace and more business operators from various
industries have entered the financial industry, our business environment is
changing rapidly. In these circumstances, we will establish a foundation
as a digital bank that has ideas unique to Sony Bank and the latest tech-
nology only possible in the Sony Group, and aim to achieve sustainable
Strategy and Review

growth by providing new value that meets the needs of each individual
customer.
Yuichiro Sumimoto
President, Representative Director
Sony Bank Inc.

for Creating Value
Internet bank for individuals
Main products: Mortgage loans with the freedom to change interest rate types and make advance
repayments
Traits
Foreign currency deposits
Sony Bank WALLET cash card with Visa debit function in 11 currencies
Main sales channels: Internet and banking agencies
Convenience leveraging the advantages of an Internet bank
Corporate Section
Strengths Extensive lineup of high-quality products
Business operation with high customer satisfaction
Reference Materials

Strategy and Review
Sony Bank
We have focused on growing into a bank that offers financial services that are easier for our customers to use, and
in order to meet the diverse asset-building needs of customers, we have strengthened our product marketability
and actively introduced technology to improve convenience.
Strengthen Product Marketability

May 2018: Automated provisional screening for mortgage loans using AI.
August and October 2018: Began offering new group credit life insurance with disease protection rider.
October 2018: Launched Fixed-rate Select Mortgage Loans.
Improve Convenience
May 2018: Upgraded the version of Sony Bank WALLET app.
February 2019: Launched Sony Bank app .
March 2019: Began providing a reference-system API*, with a gradual shift towards an open API.
* API (Application Programming Interface): An interface for one application to use the features of or data managed by another application. An API that
is available for access by third parties is called an open API.
Retail balance* Gross operating profit Ordinary profit ROE (consolidated)

(non-consolidated) (consolidated) (consolidated) %
Trillions of yen Billions of yen Billions of yen
4.2 28.3 9.5
3.9 7.3
3.6 24.0 24.6
7.1
5.5
5.0 4.1
March 31, March 31, March 31, FY2016 FY2017 FY2018 FY2016 FY2017 FY2018 FY2016 FY2017 FY2018
2017 2018 2019
* Sum of deposits, investment trusts and
personal loans.
Since March 31, 2018, also includes
financial products intermediary services
and mediated discretionary investment
contracts.
Since its founding, Sony Bank has consistently used IT technology and the Internet with the aim of
making banking easier for individual customers. Currently, we are developing digital consulting tools to
propose services that closely match the needs of each customer using APIs and data, with the aim of
promoting asset formation and investment.
Value creation
Contribute to a healthy, long-lived society Make lifestyles more convenient

Mortgage Loans
In fiscal 2018, in order to enhance the marketability of our mortgage loans, we have
worked to improve convenience while maintaining the interest rate competitiveness,
Strategy and Review

Increase and have also enhanced our product lineup and group credit life insurance. In fiscal
product 2019, we will utilize the measures of the previous fiscal year to aim for stable growth
strength and while addressing productivity.
improve service Foreign Currency Deposits
In order to expand the balance of foreign currency deposits, we will expand our
customer base through strengthening of alliances by issuing Sony Bank WALLET
tie-up cards.
Customer-first

Response to Changes
We will strengthen our foundation as a digital bank by responding to the rapid

advance toward a cashless society, by improving convenience with touch payment
Utilize Fintech
for Creating Value

support for Sony Bank WALLET and enhancing collaboration with QR payment
and improve
players. In order to improve profitability, we will promote streamlining of operation by
business
expanding the use of AI screening in mortgage loans and introducing electronic
contracts.
Through marketing, we will propose products that are tailored to individual custom-
Improve ers and advertise our convenience, and we will work to provide valuable products
proposal- and services from both digital and real perspectives. On the digital side, we aim to
making provide customer-first financial advice closely tied to the daily lives of each individual
capability by developing digital consulting tools. In terms of real contact, we will strengthen our
Corporate Section
sales structure by enhancing our proposal function in the CONSULTING PLAZA.
FY2020 Progress toward

FY2018 FY2019
Medium-term FY2020
Actual Forecast
targets*1 Medium-term targets Reference Materials
Retail balance *2(non-consolidated) ¥4.2 trillion ¥4.5 trillion ¥5.0 trillion
Gross operating profit (consolidated) ¥28.3 billion ¥29.9 billion ¥33.5 billion
Almost
in line
Ordinary profit (consolidated)
¥9.5 billion ¥8.6 billion ¥9.7 billion
ROE (consolidated) 7.3％ 6.4％ 6.8％
Reference: Sony Payment Services
Sales ¥4.3 billion ¥4.6 billion ¥5.1 billion
Ordinary Profit ¥0.8 billion ¥0.9 billion ¥1.2 billion

*2 Sum of yen deposits, foreign currency deposits, investment trusts, financial products intermediary services, mediated discretionary investment
contracts and personal loans

Strategy and Review
Nursing Care Business

Responding to the diversification of demand by developing nursing care homes under two
brands: SONARE for the upper/middle zone and Hanakotoba for the volume zone.
Traits Establishing new homes in the Tokyo metropolitan area (Tokyo, Chiba, Saitama, Kanagawa),
where further market expansion is expected
At SONARE, implementing lifecare plans tailored to the needs of each individual
Capture a wide range of needs by expanding our lineup

Strengths
Propose nursing care service suitable for each resident
In order to realize our Life Focus concept̶the pursuit of a fulfilling long life, Sony Lifecare provides solutions in
response to diversifying demand for nursing care homes by expanding its lineup with two main brands: SONARE
for the upper/middle zone and Hanakotoba for the volume zone.
Value creation
Offer lifestyles that feature safety and peace of mind Contribute to a healthy, long-lived society
Market Environment
Sony Lifecare predicts a mid- to long-term increase in the population in need of nursing care in its main area of
development, the Tokyo metropolitan area. Due to increased needs, the establishment of nursing homes is pro-
ceeding steadily, and Sony Lifecare expects demand to grow steadily for the foreseeable future.
Long-term estimates of people in major metro People requiring long-term care and number of
areas needing nursing care homes for the elderly (nationwide)
(People 1k)
Tokyo Metropolitan Area
(Tokyo, Chiba, Saitama, Kanagawa) 2,383 People requiring long-term
7,624
care (People 1k) 6,750
1,951 6,036
Percentage of homes for the elderly catering to
people requiring long-term care
1,383 Kansai region 1,445
34% 34%
1,243 33%
1,078 Tokai region 1,028
868 2,604
2,280
622 1,967
Homes for the elderly
(Homes 1k)
2015 2020 2025 2030 2035 2040 2015 2020 2025

Forecast Forecast
* Study by Tamura Planning & Operating * Homes for the elderly include homes for those who are independent

Medium-term Strategy
In order to respond to the expansion and diversification of demand for nursing homes, Sony Lifecare will capture
the demand by developing a lineup around two brands: SONARE for the upper/middle zone run by Lifecare
Design, and Hanakotoba for the volume zone run by Proud Life. In addition, we will work to further improve the
quality of management by creating synergy including sharing of knowledge between both series, and effectively
Strategy and Review

utilizing Group management resources.
Lifecare Design (SONARE, etc.)

Our SONARE brand opened its first home three years ago, and now operates three homes in total. Using the
expertise accumulated at existing homes, we will establish the SONARE brand and aim to accelerate the pace of
opening new homes from fiscal 2019 onwards.
Proud Life (Hanakotoba, etc.)

With Hanakotoba brand, we have improved our business foundation with our 26 existing homes, and plan to re-

start building new homes from fiscal 2019 onwards in order to achieve new growth.
for Creating Value

Upper/middle zone Volume zone
Upper
Cultivate the expertise we have Broaden our business foundation
accumulated over three years to es- with the establishment of new
tablish the SONARE brand and step homes in addition to 26 existing
up the pace of building new homes Hanakotoba series homes
(Operating 196 rooms as of March 31, (Operating 1,320 rooms as of March
2019)
Middle 31, 2019)
Create synergy
Volume
Corporate Section
SONARE Shakujii Hanakotoba Machida Tsurukawa
(Opened: November 2018)
Hanakotoba
Forecast number of Group-operated homes
: Lifecare Design (SONARE, others)

: Proud Life (Hanakotoba)
Reference Materials
SONARE Hamadayama
(Planning to open in
November 2019)
33
29 30
6
3 4 SONARE Mejiro Otomeyama
(Planning to open in
Spring 2020)
26 26 27
Hanakotoba Nerima
Nakamura
2018 2019 2020 2021 2022 (Planning to open in
Forecast Forecast Forecast December 2019)
* As of March 31,

Initiatives to Strengthen Our Foundation for Creating Value Corporate Governance
Corporate Governance to Achieve

Long-term Sustainable Growth
Contents
Corporate Governance
Profiles of Directors and Audit & Supervisory

Board Members 32
Basic Stance on Corporate Governance 35
Status of Initiatives by the Board of Directors,

Committees and Audit & Supervisory Board 37
Messages from Outside Directors 40
Risk Governance 43
Compliance 46

Governance at a glance
Strategy and Review

Characteristics of Corporate Governance
Type of structure
Company with Board of Directors and Audit &
Supervisory Board
Nomination Advisory Committee and

Advisory bodies for
the Board of Directors Compensation Advisory Committee
for Creating Value

Characteristics of the Board of Directors and the Audit & Supervisory Board
Board of Directors Audit & Supervisory Board
Average attendance Average attendance

rate rate
93 95
Status of holding
of meetings
％％
Corporate Section
Audit & Supervisory
Percentage of Directors Board Members
40 67
outside officers
and outside audit
& supervisory ％％
board members （4/10）（2/3）
* The status of holding of meetings is for fiscal 2018, and the percentages of outside officers and outside audit & supervi-
sory board members are as of the end of the General Meeting of Shareholders held on June 21, 2019.
Reference Materials
History of Corporate Governance

Formulation of independence standard of outside
directors and outside audit & supervisory board members
Establishment of SFH Formulation and announcement of Basic Policy on
Establishment of the Compensation Corporate Governance
Advisory Committee Establishment of the Nomination Advisory Committee
2004 2007 2015 2017
Appointment of outside director Introduction of a restricted stock

(one outside director) compensation system
Listed on the First Section of
Tokyo Stock Exchange

Profiles of Directors and

Audit & Supervisory Board Members
(As of June 21, 2019)

j i c d f e
h a b g
Directors
a. Shigeru Ishii b. Hiroaki Kiyomiya c. Yutaka Ito

President, Representative Managing Director Executive Duties Director Executive Duties
Director Executive Duties Main concurrent positions Main concurrent positions
Main concurrent positions Director, Executive Vice President, Sony Life Director, Sony Life Insurance Co., Ltd.
Director, Sony Life Insurance Co., Ltd. Insurance Co., Ltd. Director, Sony Assurance Inc.
Director, Sony Assurance Inc. Director, Sony Lifecare Inc.
Strategy and Review

Biography
Director, Sony Bank Inc. He has taken charge of actuarial affairs, ac- Director, Sony Financial Ventures Inc.
President, Representative Director, Sony counting and investment management, etc. at Biography
Financial Ventures Inc. Sony Life Insurance Co., Ltd. for many years. He was involved in management
Biography He assumed office as Director of SFH, the mainly in the administration departments of
Since the establishment of Sony Bank Inc. current position in June 2015. Sony Life Insurance Co., Ltd. and SFH, and
in April 2001, he had been involved in its Status of attendance: Attended all 17 meet- served as President, Representative Director
management as President, Representative ings of the Board of Directors of Sony Bank Inc. from June 2015 to June
Director and concurrently served as SFH s 2017. He assumed office as Director of SFH,
Length of service in office: Four years the current position in June 2015.
Director since April 2004. He assumed office
as Executive Vice President, Representative Status of attendance: Attended all 17 meet-
Director of SFH in June 2015 and the current ings of the Board of Directors
position in June 2016. Length of service in office: Five years
Status of attendance: Attended all 17 meet-
ings of the Board of Directors

Length of service in office: 15 years
for Creating Value

d. Hiroki Totoki e. Shiro Kambe f. Naomi Matsuoka
Director Director Director
Main concurrent positions Main concurrent positions Main concurrent positions
Representative Corporate Executive Officer, Executive Vice President, Corporate Executive Senior Vice President, Sony Corporation
Senior EVP, CFO, Sony Corporation Officer, Sony Corporation Biography
Director, Recruit Holdings Co., Ltd. Biography She has extensive expertise and business
Biography He has taken charge of legal, compliance, experience in financial institutions cultivat-
He has experience in executing the devel- corporate communications and CSR, etc. ed through serving as Chief Transformation
opment and launch of new businesses as of Sony Corporation for many years. He has Officer of a major insurance holding company,
a founding member of Sony Bank Inc. and been involved in management as Corporate and has been involved in management as
extensive expertise in finance. He has been Executive Officer of Sony Corporation since Senior Vice President of Sony Corporation
involved in management serving as Corporate June 2014 and assumed Office as Director of since November 2018.
Executive Officer of Sony Corporation since SFH, the current position in June 2015. Length of service in office: ―
April 2016. Status of attendance: Attended 13 out of 17
Corporate Section
Length of service in office: ― meetings of the Board of Directors
Length of service in office: Four years
g. Shiro Kuniya* h. Takatoshi Ito* i. Masashi Oka*

Outside Officer Independent Officer Outside Officer Independent Officer Outside Officer Independent Officer
Main concurrent positions Main concurrent positions Main concurrent positions
Managing Partner, Oh-Ebashi LPC & Partners Professor, School of International and Public Representative Director, Senior Executive Vice
Director, NEXON Co., Ltd. Affairs, Columbia University President & CFO, Nikon Corporation
Director, Ebara Corporation Senior Professor, National Graduate Institute Reason for appointment
Director, Takeda Pharmaceutical Company for Policy Studies He has many years of business experience
Ltd. Director, Chi-X Japan Limited at a major financial institution, and also has
Reason for appointment Reason for appointment a high level of insight on corporate manage-
Reference Materials
He has specialized knowledge and experience He possesses extensive knowledge and ment gained through serving as CEO for the
as a lawyer and an attorney licensed in the experience as an expert on subjects including Americas of that financial institution and CFO
U.S. state of New York. macroeconomics, financial policy, international of a global company.
Status of attendance: Attended 14 out of 17 finance and Japanese economic theory. Length of service in office: ―
meetings of the Board of Directors Status of attendance: Attended 13 out of 14
Length of service in office: Six years meetings of the Board of Directors
Length of service in office: One year
j. Shogo Ikeuchi* * Independent officers as set forth in Article 436-2 of the Securities Listing Regulations of the Tokyo Stock
Outside Officer Independent Officer Exchange.
・The following persons took office as Directors on June 21, 2019: Hiroki Totoki, Naomi Matsuoka,
Main concurrent positions
Masashi Oka and Shogo Ikeuchi.
Board Director and Senior Managing Corpo-
rate Executive Officer, Recruit Holdings Co., ・The following persons retired as Directors on June 21, 2019: Tomoo Hagimoto, Atsuo Niwa, Yuichiro
Ltd. Sumimoto and Isao Yamamoto.
・The status of attendance at the meetings of the Board of Directors is the results for fiscal 2018.
Reason for appointment
He has many years of experience in promot- ・The status of attendance of Takatoshi Ito is for the meetings of the Board of Directors held after his
ing new business development and overseas appointment as SFH s Director in June 2018.
expansion at a global company, and has a ・The length of service in office is as of the General Meeting of Shareholders held on June 21, 2019.
high level of insight on corporate manage-
ment gained through serving in charge of
Senior Managing Corporate Executive officer
in the areas of corporate planning and human
resources.
Length of service in office: ―

Profiles of Directors and

Audit & Supervisory Board Members
(As of June 21, 2019) l k m
Audit & Supervisory

Board Members
k. Yasuyuki Hayase*
Standing Audit & Supervisory Board
Member
Outside Officer Independent Officer
Audit & Supervisory Board Member, Sony Life
Insurance Co., Ltd.
Audit & Supervisory Board Member, Sony
Assurance Inc.
Audit & Supervisory Board Member, Sony
Bank Inc.
He has many years of business experience at
a major financial institution.
Status of attendance: Attended all 17
meetings of the Board of Directors and all 14
meetings of the Audit & Supervisory Board
l. Hirotoshi Korenaga
Audit & Supervisory Board Member
Director, Corporate Executive, Senior General
Manager, Global Accounting Division, Sony
Corporate Services (Japan) Corporation
Biography
He has been working in accounting for many
years at Sony Corporation and Sony Corpo-
rate Services (Japan) Corporation. He has
concurrently served as SFH s Audit & Supervi-
sory Board Member since June 2013.
Status of attendance: Attended 13 out of 17
meetings of the Board of Directors and 13
out of 14 meetings of the Audit & Supervisory
Board
Length of service in office: Six years
m. Yoshimichi Makiyama*
Audit & Supervisory Board Member
Outside Officer Independent Officer
Partner, Ripple Partners (law office)
Director, Filmination Co., Ltd.
He has specialized knowledge and experience
as a lawyer and an attorney licensed in the
U.S. state of New York.
Status of attendance: Attended all 17 meet-
ings of the Board of Directors and 13 out of
14 meetings of the Audit & Supervisory Board
* Independent officers as set forth in Article

436-2 of the Securities Listing Regulations of
the Tokyo Stock Exchange.
・The status of attendance at the meetings of
the Board of Directors and the Audit & Super-
visory Board is the results for fiscal 2018.
・The length of service in office is as of the
General Meeting of Shareholders held on June
21, 2019.

Basic Stance on Corporate Governance
Basic Policy on Corporate Governance
(Basic Stance on Corporate Governance)

SFH strives to meet the expectations and earn the trust of stakeholders, realize sustainable corporate growth and
increase corporate value over the medium to long term by making effective use of the Group s various manage-
ment resources and by realizing its corporate philosophy. Furthermore, as a financial holding company, SFH is
Strategy and Review

aware of the highly public nature of its financial business. Accordingly, SFH has in place a governance structure
that emphasizes ensuring of soundness and appropriateness of the Group s management. SFH is a listed subsid-
iary of Sony Corporation. As such, SFH maintains managerial independence from its parent company and strives
to ensure a highly transparent management.
(Appointment and Dismissal of Directors)

SFH has formulated the Basic Policy on the Selection of Director and Audit & Supervisory Board Member Can-
didates. Reflecting this policy, SFH selects as director and audit & supervisory board member candidates who
have suitable knowledge, experience, capacity for judgment and other characteristics suiting them to conduct
decision-making and perform management oversight in relation to the overall Group management. To reinforce

the transparency and objectivity of the process of selecting director and audit & supervisory board member can-
didates, the Nomination Advisory Committee deliberates on candidates in response to inquiries by the Board of
Directors. After receiving the committee s reports, the Board of Directors decides on candidates to propose at
for Creating Value

the General Meeting of Shareholders. The Nomination Advisory Committee deliberates on the appointment and
dismissal of the president and other executive directors based on the aforementioned policy, an assessment of
corporate operating performance and other items. The committee then reports to the Board of Directors, which
makes a decision.
(Director and Audit & Supervisory Board Member Training)

Upon their appointment, SFH provides opportunities for directors and audit & supervisory board members to
acquire knowledge related to laws and regulations, corporate governance and other areas necessary for appro-
priately fulfilling their roles and responsibilities. In particular, when outside officers and audit & supervisory board
members are newly appointed, SFH creates opportunities to provide the information necessary to promote an
understanding of SFG s businesses, management strategy, management issues and other areas. SFH also creates
such opportunities as necessary following their appointment.
Corporate Section
Basic Policy on Corporate Governance, Corporate Governance Report and Basic Policy on Establishing an Internal Control Sys-
tem on SFH s website,
https://www.sonyfh.co.jp/en/company/governance.html
P1 Sony Financial Group s Mission, Vision & Values
P70 Relationship with Parent Company, Sony Corporation
Reference Materials

Basic Stance on Corporate Governance
Corporate Governance Structure Chart (As of July 1, 2019)
: Inside Director/Inside Audit & Supervisory Board Member ：Outside Director/Outside Audit & Supervisory Board Member ( marks indicate chairpersons)
General Meeting of
Shareholders
SFH
Audit & Supervisory Board*2 ★

Nomination Advisory ★ Audit & Supervisory Board
Members
Committee*3
Board of ★
Directors*2
Independent
Compensation ★ Auditors*1
Advisory Committee*4
Executive Committee
Business Execution Departments Audit Department
Serve concurrently as
directors and audit Share and confirm Report and Discuss in Manage and advise
Convey Group policies
& supervisory board information confirm advance Monitor
members
Subsidiaries, etc.
*1 Compensation, etc. for independent auditors: ¥120 million, including ¥28 million for statutory audits.
*2 SFH provides the independence standard for appointment of outside officers and outside audit & supervisory board members in the Basic Policy
on the Selection of Director and Audit & Supervisory Board Member Candidates.
*3 The Nomination Advisory Committee members: Shiro Kuniya (Chairperson), Shogo Ikeuchi, Shigeru Ishii and Shiro Kambe
*4 The Compensation Advisory Committee members: Masashi Oka (Chairperson), Shiro Kuniya and Shigeru Ishii
The Basic Policy on the Selection of Director and Audit & Supervisory Board Member Candidates on SFH s website,
https://www.sonyfh.co.jp/en/company/data/nomination_policy.pdf

Status of Initiatives by the Board of Directors,
Committees and Audit & Supervisory Board
Board of Directors
Chairperson Shigeru Ishii

The Board of Directors recognizes the responsibility it has been entrusted with and strives to realize sus-
tainable growth of SFG and increase corporate value over the medium to long term. In addition to items
stipulated in laws and regulations and the Articles of Incorporation, the Board of Directors makes important
decisions regarding management of SFG such as formulation of SFG s management policies and man-
Main roles
Strategy and Review

agement plans; appointment and dismissal of directors, Audit & Supervisory Board members and other
executives of subsidiaries in which SFH holds shares directly; entry into new businesses and withdrawal
from businesses; and organizational restructuring. The Board of Directors also supervises the overall Group
management.
Composition The ratio of outside directors: 40%
The Board of Directors continued to conduct deep deliberations centering on overall Group governance,
Operational status, Group growth strategies, business plans, sustainability and important matters related to Group subsidiaries.
topics The board also received periodic reports concerning the state of progress of SFH s non-consolidated and
(FY2018) consolidated business plans, as well as the status of compliance activities, risk management and internal
audits. In these ways, the board conducted appropriate supervision of overall Group management.
Meetings held and the

17 times
average attendance rate
93%
(FY2018)
for Creating Value

Nomination Advisory Committee
Chairperson Shiro Kuniya (Outside Director)

The Nomination Advisory Committee deliberates and reports on the appointment and dismissal of SFH s
Main roles directors, audit & supervisory board members and the Group companies presidents, as well as the succes-
sion planning of SFH and the Group companies presidents.
Composition Half are outside directors
Operational status, topics The Nomination Advisory Committee decided on director candidates for SFH and made approvals regarding
the appointment of directors and the selection of representative directors for the Group s three main compa-
(FY2018) nies.
Five times
Corporate Section
95%
(FY2018)
Compensation Advisory Committee
Chairperson Masashi Oka (Outside Director)

The Compensation Advisory Committee deliberates the policy and total amount of compensation for SFH s
directors and the Group companies representative directors who are to be proposed at a General Meeting
of Shareholders. The committee also deliberates the amount of compensation for individual directors and
Main roles
the Group companies representative directors, within the limits set by a resolution at a General Meeting of
Shareholders. It reports the results of its deliberations to the Board of Directors. Members of this committee
do not participate in deliberations on their own compensation.
Composition Majority are outside directors
Reference Materials
Operational status, topics The Compensation Advisory Committee decided on individual levels of compensation for SFH s directors
and executive officers, and approved the levels of individual compensation for the Group s three main com-
(FY2018) panies directors.
One time
100%
(FY2018)
Audit & Supervisory Board
Chairperson Yasuyuki Hayase (Outside Audit & Supervisory Board Member)

The Audit & Supervisory Board, an organization independent from the Board of Directors, audits the suitabil-
ity and appropriateness of directors performance of their duties by calling for business reports of the Group
Main roles
companies based on laws and regulations, surveying their operational and financial status, and exercising
their right to appoint and dismiss the independent auditors.
Composition Majority are outside audit & supervisory board members
The Audit & Supervisory Board received reports on directors and corporate executive officers performance
Operational status, topics of their duties, including their business management of the Group companies. Primarily, they confirmed the
(FY2018) effectiveness of systems to ensure the appropriateness of operations (internal systems) and made sugges-
tions, as appropriate.
14 times
95%
(FY2018)
Status of Initiatives by the Board of Directors, Committees and Audit & Supervisory Board
New Management Team Board of Directors

(Change in the Composition of the Board of Directors) Nomination Advisory Committee
In order to reinforce SFG s management structure to enhance the sustainable corporate value, SFH has changed
the composition of its Board of Directors. The Board of Directors under the new management structure consists of
outside directors, members of Sony Corporation s management team, and people from SFH s management, and
is designed to further strengthen the governance from the perspective of shareholders and stakeholders. Mean-
while, the presidents of three main subsidiaries, who had served concurrently as SFH s directors, will concentrate
more on the sound growth and enhancing the competitiveness of their own businesses under the governance of
SFH s Board of Directors. Under the new management team, SFH will promote the further growth of each busi-
ness and manifest synergies across SFG.
Through the change in management team, we increased the number of independent outside directors* by one
to four (one-third or more of the Board of Directors) and appointed a female director, thereby increasing the diver-
sity of the Board of Directors and further enhancing its effectiveness.
Regarding the Boards of Directors of the Group s subsidiaries, SFH s President, Representative Director, ex-
ecutive directors and executive officers will continue to serve concurrently as directors of the Group s subsidiaries,
with the aim of increasing the effectiveness of the Group s governance and ensuring the sound business manage-
ment of each company.
* SFH designates outside directors as independent officers, whose placements are required by the Tokyo Stock Exchange, for the protection of gen-
eral shareholders.
P70 Relationship with Parent Company, Sony Corporation
Evaluation of Effectiveness of the Board of Directors (Fiscal 2018) Board of Directors
SFH s Board of Directors conducts self-evaluations, evaluating the effectiveness of its own decision-making and
oversight, as well as its operation of meetings at least once a year.
Evaluation outline and process

Outline: An independent third-party evaluation company assessed the effectiveness of the Board of Directors with a question-
naire given to all directors and audit & supervisory board members.
Question items: Composition and operation of the Board of Directors, Management and business strategies, Corporate
ethics and risk management, Evaluation and compensation of management, Matters related organizational and business
restructuring, Dialogue with shareholders, etc., and Self-evaluations. In addition, an evaluation was conducted regarding
responses to items that were raised as issues in the previous year s evaluation of effectiveness.
The results of the assessment by the third-party evaluation company

1) Evaluation Results of the Overall Board of Directors
As in fiscal 2017, a high level of effectiveness has been achieved.
The size of the Board of Directors is appropriate, for the business size and field of the Group.
There is a free and active atmosphere in which all members proactively contribute to the meetings. There is also appropriate
decision-making and supervision under the leadership of the chairperson.
As SFH is a listed subsidiary, the Board of Directors recognizes minority shareholder protection and arm s-length rules. In deci-
sion-making and information management, the board seeks to ensure management independence from Sony Corporation and
conduct sufficient management with a high degree of fairness and transparency.
The Board of Directors endeavors to obtain and understand the details of its meeting agenda and other information in advance.
The Board of Directors strives to contribute to its own decision-making and supervision. Furthermore, the Board of Directors has
sufficient knowledge regarding the various laws, regulations and rules related to SFG, SFH responsibilities and duties as a listed
company, and corporate governance.
The member composition of the Compensation Advisory Committee and the Nomination Advisory Committee is appropriate.
2) Evaluation Results and Opinions Regarding fiscal 2017 Issues
While various improvements have been made on issues raised in the fiscal 2017 evaluation of effectiveness,
the following opinions were received:
Discussions on the Group s growth strategies need to be continued, considering the Group s overall optimization and lessons
learned from the past.
More opportunities for study or training related to the Group s management and businesses are needed.
Although incentive compensation plans for management have been expanded with a new restricted stock compensation plan,
a desire for continuous consideration of expanding the scope of coverage, changing its proportions and other issues were ex-
pressed.
Just the right amount of Board of Directors details and deliberation results are reflected in the minutes. However, further im-
provements are necessary on the operational front (including presentations, meeting frequency, allocation of time and the timing
for distributing materials in advance).

Future Responses
From the results of this evaluation, SFH s Board of Directors judges itself to be wholly effective at this time. That said, the
Board will strive to further enhance its effectiveness by continuously discussing the Group s growth strategies, improving
understanding of the Group s management and business, and enhancing systems such as compliance and monitoring.
First, the new management team after the General Meeting of Shareholders in June 2019 clarifies the roles of the
holding company and the operating companies, and the Board of Directors composition has been changed to reinforce
Group governance. Specifically, the number of outside directors has been increased to one third or more, and diversity
Strategy and Review

has been increased, such as through the inclusion of a female director.
Policy for Determining Compensation Board of Directors Compensation Advisory Committee
SFH sets the Policy for Determining the Compensation of Directors and the Policy for Determining the Compensa-
tion of Audit & Supervisory Board Members. SFH has also created the Compensation Advisory Committee Regu-
lations and established the Compensation Advisory Committee (please see page 37) as its deliberative body.

Basic policy
Compensation of executive directors is determined according to the position, in consideration of the balance between a fixed
portion, results-linked portion, and medium- to long-term incentive portion, to ensure that compensation serves as an effective
for Creating Value

incentive for improving the business performance of the entire Group.
In principle, directors with no executive duties, excluding outside directors, are paid no compensation.
Outside directors are paid fixed compensation according to their roles. Audit & supervisory board members are paid fixed com-
pensation according to their respective roles of standing audit & supervisory board members and non-standing audit & supervi-
sory board members.
Process
For the amount of compensation of individual executive directors and outside directors, the Compensation Advisory Committee
chaired by an outside director carries out deliberations in response to the Board of Directors, and directors who are entrusted
by the Board of Directors decides the amount based on a report from the Compensation Advisory Committee.
The amount of compensation for individual audit & supervisory board members is determined by deliberation of audit & supervi-
sory board members.
Corporate Section
Compensation structure
Executive directors: Compensation comprises a fixed portion depending on the position, a results-linked portion depending on
the entire SFG s performance and individual responsibilities, and a medium- to long-term incentive portion in the form of a stock
compensation.
〈Fixed portion〉As an executive s level of seniority increases, the fixed portion decreases as a percentage of annual compen-
sation, while the results-linked portion makes up a growing percentage. (Fixed portion: 62%-71%; Results-linked portion: 38%-
29%)
〈Results-linked portion〉The results-linked portion can range from 0% to 200% of the standard amount (100%) (The result for
fiscal 2018: 109%). Indicators for the results-linked portion include meeting expectations and earning the trust of all stakehold-
ers by realizing sustainable growth of SFG and increasing corporate value over the medium to long term, as measured by key
performance amounts at the Group companies compared with planned levels and the previous fiscal year. The Compensation
Advisory Committee confirms the calculation results of the results-linked portion based on indicators, and reports the amount of
compensation for individual executive directors to the Board of Directors.
Reference Materials
〈Medium- to long-term incentive portion〉The medium- to long-term incentive portion, which accounts for approximately 20%
of total annual compensation, comprises restricted stock compensation, which has a restriction on transfer for a certain period
following acquisition, and stock-type compensation stock options, which can be exercised following retirement.
Outside directors: A fixed amount is paid according to the role.
Audit & supervisory board members: A fixed amount is paid according to the role of standing audit & supervisory board mem-
bers and non-standing audit & supervisory board members.
Graphs representing the compensation structure Compensation for SFH s Directors and Audit &
Supervisory Board Members for Fiscal 2018
: Fixed portion : Results-linked portion : Medium- to long-term incentive portion
Total amount by compensation category
Restricted Number
Total amount of Fixed com- Results-linked Stock stock
President, Representative Director (Millions of yen) com- of payees
compensation pensation compensation options pensation
5 3 2
Directors (internal) 182 93 49 32 6 3
Directors (excluding Representative Director) Directors (outside) 27 27 ̶ ̶ ̶ 3
5.5 2.5 2 Audit & Supervisory
Board Members ̶ ̶ ̶ ̶ ̶ ̶
(internal)
Outside Directors
Audit & Supervisory
10 Board Members 30 30 ̶ ̶ ̶ 2
(outside)
Total 240 152 49 32 6 8
Corporate Governance Report on SFH s website, Notes: 1. Compensation refers to compensation, bonuses and other financial benefits received from SFH in
consideration of execution of duties.
https://www.sonyfh.co.jp/en/company/data/governance_report.pdf 2. Compensation categories refer to fixed compensation, results-linked compensation, stock options,
restricted stock compensation, and bonuses and others. SFH did not pay bonuses as compensation
for directors and audit & supervisory board members prior to and including fiscal 2018.

Messages from Outside Directors
Shiro Kuniya Outside Director
Expectations for the New Initiatives for Human Resource

Management Structure Development and Succession Planning
Following the General Meeting of Shareholders held In view of the challenging business environment
in June 2019, the composition of SFH s Board of surrounding financial institutions and the significance
Directors has changed dramatically. The Nomination of growth strategies for the future, it is important
Advisory Committee has deliberated the importance for SFH to develop human resources and cultivate
of active cooperative efforts with the Sony Group successors, capable of adequately adopting new
while retaining SFH s independence, particularly in business models and financial techniques, as well as
relation to obtaining technological and other types implementing both domestic and overseas strategies
of cooperation from the Sony Group in the utilization in their own initiatives. Along with the development
of blockchains and other forms of Fintech, as well of human resources over the medium to long term,
as exchanges of personnel and development of new SFH also needs to hire talented people from outside
products and services, from the perspective of in- the Group as necessary. To that end, it is essential
tegration of new technologies and financial services for SFH to duly consider a compensation structure
under the Sony Brand. I believe that the addition to that allows prospective candidates to perform at their
the Board of Directors of new members from Sony full potential at SFH, from the viewpoint of enhancing
Corporation (Mr. Totoki and Ms. Matsuoka, who have domestic and global competitiveness. I believe it is
broad experience in the financial and insurance fields) unavoidable to create a competitive compensation
and from outside (Mr. Oka, who has a wealth of prac- structure according to each role, while paying due
tical experience working at major banks, both domes- consideration to domestic and overseas regional
tically and overseas, as well as Mr. Ikeuchi, who has characteristics. SFH has already in place a compen-
experience in various types of business planning and sation structure that incorporates a results-linked
execution, including overseas business) is consistent incentive element to a certain degree, but it also
with our discussion thus far at the Nomination Advi- needs to continue considering appropriate alterations
sory Committee, and is of significant importance for to the compensation system as necessary in light of
SFH s growth strategies, going forward. Meanwhile, the domestic and overseas situations.
the presidents of the Group s three primary subsidiar-
ies in the life insurance, non-life insurance and bank-
ing businesses retired as SFH s directors. I hope that
they will continue to actively exchange opinions and
Issues and Expectations for the Future
information with SFH s directors through occasions
such as the Group companies Executive Committees Looking ahead to business development in fiscal
while concentrating on their own businesses, toward 2019 and beyond, what is expected of SFH is to have
maximization of synergies for the entire Group. out-of-the-box ideas, acquire and cultivate diverse
human resources who can make such ideas possi-
ble, and swiftly consider and execute flexible strategic
business alliances and other actions. I am hoping for
SFH s members to make united efforts in conducting
flexible and diverse business activities from the per-
spective not only of SFG but also of the broader Sony
Group as a whole.

Strategy and Review
Takatoshi Ito Outside Director

Reflecting on My First Year as businesses in the U.S. and Japan have developed
from quite different institutional backgrounds. How-
Outside Director ever, the differences between the banking businesses
for Creating Value

of the two countries have been diminishing in recent
years and they are in the process of converging into
I assumed the office of SFH s outside director a year the global standards that have been established.
ago. Macro-finance and international finance are Internet banking, or more generally speaking,
among my specialized areas of research, but closely Fintech, has spread rapidly in the U.S., and people
examining the statements of income, balance sheets, seldom visit a bank branch physically nowadays. All
and business plans of individual companies was not financial transactions are now completed online. It
at the center of my research activities. Although I had looks as though internet banking has yet to become
to put in some time to brush up on this area right widespread in Japan, but it is certain that Japan will
after assuming the office as outside director, to my experience a shift towards internet banking and cash-
relief, I think I have managed to become sufficient- less settlements going forward.
Corporate Section
ly familiar with the finances of the Company. SFH s Turning to the insurance business, insurance
Board of Directors is operating efficiently with active products with specialized coverage, or the so-called
discussion taking place, and has an atmosphere that risk-segmented insurance products, have become
allows outside directors to openly make comments. I available, and has gained popularity through on-
feel that corporate governance in SFH is improving. line sales. In the U.S., applications for life and non-
The Sony Group s financial business compris- life insurance policies, credit examinations, and risk
es life insurance, non-life insurance, and banking assessments are conducted without any face-to-face
businesses, and these businesses have issues and communication involved. In the future, the use of AI
challenges, or opportunities for a dramatic growth, is expected to allow faster and more accurate risk
that are specific to each business category. Consid- screening and assessment of accident situations in
ering this, I find my duties very rewarding. I have been Japan, as well.
continuously giving consideration to the very import- The SFG s financial businesses have their own
Reference Materials
ant issue of what roles SFH should play as a holdings characteristics: Sony Life sells insurance products,
company that manages three financial companies. mainly through Lifeplanner sales employees; Sony
It is essential that SFH establish a framework for Assurance sells non-life insurance products, mainly
creating synergies among the companies. I believe online; and Sony Bank specializes in internet banking.
SFH has a potential for a dramatic growth if it can get A major issue for the Board of Directors of SFH is to
synergies to work. That is the reason I accepted the consider how the Group can take advantage of these
offer to serve as its outside director. characteristics of its financial arms, in the course of
future development of Fintech. I will continue pro-
viding comments from a broad perspective with the
independent, outsider s eyes.
SFG s Issues for the Future from a
Global Perspective
I have had dealings with the financial industry (notably

banks) in the U.S. and Japan as research subjects or
as their customer for more than 40 years. The banking

Dialogue with Shareholders and Other Investors

For constructive dialogue with shareholders and other investors, SFH has formulated the Investor Relations (IR) Poli-
cy,established the department in charge of IR activities and assigned a corporate executive to oversee IR activities.
The department in charge of IR strives to provide information related to the assessment of corporate value in a
timely, accurate and fair manner to shareholders and other investors,as well as to facilitate sufficient dialogue with
them, while sharing information appropriately with SFH s business execution departments and Group companies.
IR Policy on SFH s website,

https://www.sonyfh.co.jp/en/financial_info/ir_policy.html
Investor Relations (IR) Initiatives in Fiscal 2018

Earnings briefings (teleconferences with domestic institutional In January 2019, a small meeting with outside
Four times
investors and analysts) directors themed on governance was held for
Corporate strategy meeting One time
domestic institutional investors and analysts.
Individual meetings with institutional investors and analysts Approx. 190
Total
Overseas IR meetings (UK, USA, Hong Kong, Singapore)
Four times
Briefings for individual investors Nine times
Small meetings for domestic institutional investors and analysts Two times
Facilitating the Exercise of Voting Rights

Early dispatch of the Notice of Convocation for the General Meeting of
Shareholders
Setting the date of the General Meeting of Shareholders to avoid dates on
which other companies General Meetings of Shareholders are concentrated A Small Meeting Between SFH s Outside Direc-
Use of an electronic voting platform tors, Investors and Analysts on SFH s website,
Providing a partial translation of the Notice of Convocation in English https://www.sonyfh.co.jp/en/financial_info/
Utilizing SFH s website to disclose the Notice of Convocation for General management_vision/190121_01.pdf
Meeting of Shareholders and final shareholder voting results
Policy on Business-related Shareholdings

SFH and its Group companies do not hold shares for the purpose of business-related investment (hereinafter, busi-
ness-related shareholdings ). However, this excludes investments having a recognized strategic significance, such
as business tie-ups, that contribute to enhancing the corporate value of SFG.
In the event that SFH and its Group companies hold business-related shareholdings, they regularly consider
the objectives of such holdings and the effect of investment, and report these results to their respective Boards of
Directors. Based on these reports, the companies Boards of Directors consider the liquidation of such holdings
through such methods as sale or transfer in the event the significance of holding them has been lost.
With regard to the exercise of voting rights in relation to business-related shareholdings, SFH and its Group
companies make comprehensive decisions to vote for or against individual proposals from the perspective of
whether appropriate governance structures are in place at investee companies, whether appropriate decisions are
being made to enhance corporate value over the medium to long term, and from the perspective of enhancing the
corporate value of individual Group companies.
SFG held shares in three listed companies (balance sheet amount of ¥8.2 billion) as business-related share-
holdings as of March 31, 2019. The Group periodically confirms the investment impact of such shareholdings.
Corporate Governance Report on SFH s website,

https://www.sonyfh.co.jp/en/company/governance.html
Adoption of Japan s Stewardship Code (Sony Life)

As an institutional investor, Sony Life has announced its adoption of Japan s Stewardship Code ̶ a set of princi-
ples guiding the responsibilities of institutional investors. Sony Life discloses the basic policy and process for the
exercise of voting rights of domestic listed shares, as well as final shareholder voting results, etc.
Please see Basic Stance on Japan s Stewardship Code and Exercise of Voting Rights by Sony Life on Sony Life s website.
(Japanese only):
https://www.sonylife.co.jp/company/management/jsc/

Risk Governance
One of SFH s roles as a financial holding company is to further enhance and integrate Groupwide risk manage-
ment by centralizing the Group s management resources. SFH has formulated the Basic Policy on Group Risk
Management and develops a risk management structure by aligning it with Groupwide strategic objectives and
management policies. In addition, SFH seeks to enhance the corporate value of the Group by tailoring operating
subsidiaries risk management to the types of risks inherent in their respective lines of business.
Risk Management on SFH s website,
Strategy and Review

https://www.sonyfh.co.jp/en/company/risk_management.html
Approach to Risk Management by SFH and Group Companies
SFH has formulated the Fundamental Principles for Risk Management and communicates them to directors,
employees, and throughout the SFG. It also identifies the scope and types of risks of the Group companies, and
establishes structures designed to manage such risks effectively. SFH s department in charge of risk management

controls risks through monitoring and holding Risk Management Meetings with the subsidiaries risk management
divisions. It also reports its findings on the state of risk management regularly to SFH s Board of Directors and
Executive Committee.
for Creating Value

The Group companies optimize types and definitions of their risks according to scale, characteristics and busi-
ness model. They have established risk management frameworks, with the aim of autonomously assessing, moni-
toring, and managing these risks.
Contingency Management System
SFH has established a contingency plan as part of the Group s comprehensive policy on business continuity for
times when ordinary business operations of SFH or Group companies are at risk due to accidents, system failures
Corporate Section
or other factors. Group companies have developed regulations, manuals and other guidelines reflecting their re-
spective business volume and nature of business activities. SFH has a system in place whereby Group companies
report to SFH when they are unable to continue ordinary business operations. If SFH determines that a reported
situation is difficult to address under the risk management system set forth in the Fundamental Principles for Risk
Management, among other guidelines, SFH shall establish a contingency response headquarters led by the Pres-
ident, Representative Director of SFH and execute business continuity measures aimed at the full restoration of all
operations.
Group ERM Reference Materials
SFG has introduced its ERM framework.

P15 Strategy and Review, Sony Financial Group

Risk Governance
Risk Management Structure of SFG (As of July 1, 2019)
SFH
Board of Directors
Report
Report
Audit & Supervisory Audit

Executive Committee
Board Audit Department
Audit
Risk Management Department

(Centralized Risk Management)
Supervisory Department: Supervisory Department: Corporate

Supervisory Department: Risk Management Department
Compliance Department Communications Department
Investment Risks Liquidity Risk Administrative Risk
Legal Risk Reputational Risk
Market-related
Risk Insurance Systems Risk
Credit Risk Underwriting Risk
Real Estate Business
Investment Risk Continuity Risk
Present risk management

Confirm Report Risk Management Meetings Manage, advise, monitor
policies
Subsidiaries, etc.
Each company autonomously puts risk management into practice
Types and Definitions of Risks
Type Definition
Market-related Risks associated with losses due to changes in the value of assets and liabilities, including off-balance-sheet items, as a result of unfavorable
Risk fluctuations in interest rates, the value of securities held, exchange rates and other factors.
Risks associated with losses due to declines or losses in the value of assets, including off-balance-sheet items, resulting from deterioration in
Credit Risk
the financial position of retail and corporate customers and other contracts entered into.
Real Estate Risks associated with losses due to declines in the market value of owned real estate or in the profitability of real estate holdings on account of
Investment Risk unfavorable trends in prices and rents, respectively.
Risks associated with losses are as follows:
Cash Flow Risk: Risks associated with losses due to our inability to make cash payments because of failure to maintain sufficient cash
reserves at settlement, as well as risks associated with losses if SFH and Group companies are forced to raise funds under unfavorable
Liquidity Risk conditions in order to fulfill cash payment obligations
Market Liquidity Risk: Risks associated with losses due to the Group s inability to conduct market transactions, in particular from an inability
to unwind the Group s market position at a given time, as well as risks associated with losses if the Group is forced to complete transactions
under unfavorable market conditions, in each case due to market turmoil or other factors.
Insurance Risks affecting the Group due to significant differences between the assumptions SFH and Group companies use to establish appropriate in-
Underwriting Risk surance premium levels, including assumptions regarding the expected frequency and scale of insured events and future economic conditions.
Administrative Material and immaterial risks affecting the Group due to errors, misconduct, malfunction and other factors related to problems with the
Risk Group s internal administrative processes.
Material and immaterial risks affecting the Group due to IT-system malfunction or breakdown, and improper use or leakage of confidential
Systems Risk
information stemming from IT-system problems.
Risks affecting the Group due to violations of applicable laws, rules and regulations occurring during the course of business operations, as well
Legal Risk
as the risk of loss due to litigation or infringements of rights.
Material and immaterial risks associated with losses resulting from harm to the Group s reputation in the market and among customers as a
Reputational Risk
result of unethical behavior, unfair business practices, improper disclosure or other factors.
Business The risk that SFH and Group companies will be unable to continue operations as a result of a deterioration in financial position, liquidity problems,
Continuity Risk system failures, scandals, disaster, accidents or other crises.
Note: As the operating and business environment changes, the Group companies risk management departments review the risk types and defini-
tions, amending them as appropriate for new conditions.

Initiatives on Cyber Security
SFG regards an IT-system as critical infrastructure and resources to achieve its corporate vision, to provide
high-value-added products and services. It is thus essential to stably maintain and provide this IT-system at all
times. SFG has positioned dealing with the threat of cyber-attacks and appropriately managing information assets
as a priority issue that top management should take the lead in addressing, and the entire Group has been work-
Strategy and Review

ing on information security measures.
The policy and details of information security measures are periodically reported at meetings of the Executive
Committee and the Board of Directors of SFH or each of its subsidiaries, and SFH monitors the status of respons-
es to information security threats and development of personal information management system, etc. of each
company and confirms the appropriateness of such measures.
SFG has established an information security policy and various related regulations according to each com-
pany s businesses, and makes necessary revisions according to changes in the operating environment and other
factors. SFG also provides necessary training on information security matters that all executives and employees
should be aware of to ensure a thorough dissemination of such matters.

Characteristics of the IT Environment
for Creating Value

SFG has diverse functions, and each Group company has a different business model according to its business
category. The IT-system of each Group company has established an independent optimal environment, in accor-
dance with its business model.
This ensures that even if a Group company experienced a website attack, unauthorized login, or virus or mal-
ware infection, the IT-systems of other Group companies would not be affected.
Development of Cyber Security System –CSIRT*
CSIRT members of Sony Life, Sony
Corporate Section
External information security Information provision
Assurance, and Sony Bank, which are organization
Implementation of joint training,
etc.
SFG s primary companies, are working
to implement various measures to tackle Proactive involvement of top
cyber-attacks, and the entire Group, management
Establishment of a cyber security
centering on SFH, is actively sharing framework
information. In addition, the Group has Establishment of a multi-layered
SFG companies protection
continuously been developing systems Responses to security incidents
to counter threats through collaboration Security assessment
Establishment of regulations,
with an external information security training, etc.
organization.
Monitoring
* Computer Security Incident Response Team SFH Information sharing, etc.
Reference Materials
Privacy Policy
SFH has formulated a Privacy Policy governing the handling of personal information. It sets out SFH s policies on
the acquisition and use of personal information for specific purposes. SFH has also established Rules Concerning
Protection of Personal Information, which set out specific security control protocols. SFH monitors the effective-
ness of each Group companies security control protocols.
Privacy Policy on SFH s website,

https://www.sonyfh.co.jp/en/notice/privacy_policy/

Compliance
Basic Stance on Compliance
SFH s broad definition of compliance is that it enforces compliance with the laws, regulations and social norms
and manages business operations transparently and properly based on a strong sense of ethics. SFH considers
compliance one of its top management priorities and, accordingly, it has systems in place to ensure that all execu-
tives and employees are fully aware of their duties and responsibilities.
While Group companies are responsible for establishing systems to enhance the effectiveness of compliance
according to their specific industry and scale of business operations, SFH, as a financial holding company, under-
takes the ongoing monitoring and promotion of the Group companies compliance by providing advice, as needed,
from the viewpoint of Group management.
Compliance on SFH s website,

https://www.sonyfh.co.jp/en/company/compliance.html
Compliance System of SFG
SFH
Audit & Supervisory

Board of Directors
Board Audit
Executive Committee
Report Direct and Report
advice
Director in Charge
Report Direct and

advice
Compliance Department Audit Department

Internal
Control over the planning and implementation of compliance measures audit
Report Compliance Meetings Advise and monitor
Subsidiaries, etc.
Compliance Activities at SFG
SFH has established the Sony Financial Group Code of Conduct (hereinafter referred to as the SFG Code of
Conduct ) that all executives and employees must observe. In addition, SFH s Board of Directors is responsible for
establishing and maintaining SFH s compliance system by formulating a Compliance Manual* and a Compliance
Program**, as well as working proactively to ensure its proper operation.
Group companies have also adopted their Code of Conducts based on the SFG Code of Conduct, while put-
ting in place and developing their compliance systems on their own. SFH provides guidance and support to ensure
proper operation of the compliance systems at Group companies.
* The Compliance Manual outlines SFH s compliance system, as well as the Group s corporate philosophy, which executives and employees must
understand. The manual also establishes measures for handling behavior that conflicts with laws and regulations or behavior that raises compliance
issues, and for confirming compliance status.
** The Compliance Program is drafted annually, in principle, and defines a specific action plan for confirming compliance status, conducting training
and for other related items.
Sony Financial Group Code of Conduct on SFH s website,

https://www.sonyfh.co.jp/en/company/data/code_of_conduct.pdf

Specific Initiatives for Thorough Compliance
SFG strives to ensure thorough implementation of compliance measures through regular dissemination of messag-
es from top management, and works on various measures to promote compliance, including training for all execu-
tives and employees.
Primary domains of focus of compliance initiatives
Strategy and Review

Fostering an ethical corporate culture Information security Proper conduct in the workplace
Internal hotline system Anti-money laundering and countering (Prevention of harassment, respect for
Prevention of bribery financing of terrorism human rights, etc.)
Personal information protection Eradication of anti-social forces Fair competition
Prevention of insider trading
Internal Hotline System Basic Group Policy on Eradicating

Anti-social Forces

If executives and employees of SFG, as well as tem-
porary employees and the employees of business
partners, think that business policies, operating activi- SFH has formulated the Basic Group Policy on
for Creating Value

ties or other activities of the companies breach (or Eradicating Anti-social Forces, whereby SFH and
could breach) applicable laws and regulations, they Group companies include setting up an organiza-
can report their concerns by choosing and notifying tional unit responsible for dealing with anti-social
either hotline desk at SFH or at their own Sony Finan- forces, appointing a person responsible for refusing
cial Group company, or the Sony Group hotline desk. unreasonable demands and gathering information on
A total of approximately 70 reports were received anti-social forces in collaboration with external spe-
by the hotline desk at SFH and Group companies in cialized agencies. The Group works uniformly in its
fiscal 2018, the majority of them related to the work- effort to eradicate anti-social forces.
place environment, the organization s management
Basic Group Policy on Eradicating Anti-social Forces on
and the course of business operations. SFH imple-
SFH s website,
ments appropriate measures to protect those who https://www.sonyfh.co.jp/en/company/compliance.html
contact these desks, while strictly managing and
Corporate Section
responding to the information provided.
Prevention of Insider Trading
Anti-money Laundering and
Countering Financing of Terrorism SFH has established the Basic Group Policy on the
Prevention of Insider Trading, whereby a structure for
the prevention of insider trading has been developed
SFG gives high priority to anti-money laundering and at SFH and Group companies. SFH monitors whether
countering financing of terrorism as an important such a framework is adequately in place and working
management, and has formulated the Basic Group effectively in the prevention of insider trading at Group
Policy on Anti-money Laundering and Countering companies, and takes actions as necessary.
Financing of Terrorism. SFG gives the necessary
Reference Materials
authorization and allocates resources in a top-down

manner, and proactively instills an awareness regard-
ing anti-money laundering and countering financing of
terrorism among all executives and employees.
Conflicts of Interest Policy (Summary)

SFH formulated the Conflicts of Interest Policy* to ensure that customers interests are not harmed by Group com-
panies. The director in charge of the Compliance Department, as the manager responsible for managing conflicts of
interest, shall require Group companies to take the following actions when he/she deems them necessary based on
reports from Group companies, customer complaints or other sources.
Sever the flow of information between divisions that have Disclose the fact or the possibilities of a conflict of interest to
potential conflicts of interest customers
Suspend the transaction concerned, or change the terms Take other actions deemed necessary
and conditions or method of the transaction
SFH shall retain records that specify transactions to be managed and that are associated with actions taken to
properly protect customers, for five years.
Conflicts of Interest Policy on SFH s website,
https://www.sonyfh.co.jp/en/company/data/conflicts_of_interest_policy.pdf

Initiatives to Strengthen Our Foundation for Creating Value Human Resources
Approach to Human Resources Management
SFG strives to foster an organizational culture that supports a spirit of freedom and open-mindednes and create
a workplace where diverse, self-disciplined employees can actively work with motivation. In addition, SFG, with a
belief that personal growth of employees will lead to contributions to customers and sustainable corporate growth,
makes active efforts to develop human resources. Further, SFG facilitates personnel exchanges and joint training
among Group companies to create synergies for the Group.
Initiative1 Diversity
Policy on Diversity
SFG places significant emphasis on a spirit of diversity, to better address various changes in the environment
surrounding customers and their diverse value perceptions and to generate new value. Based on this approach,
SFG strives to develop an environment in which diversity is respected and every employee can actively work with
motivation, as well as to create opportunities for employees personal growth.
Specific Measures
SFG implements various initiatives to allow diverse human resources, including female and disabled employees
and employees who are dealing with a range of situations, including childcare and nursing care, to work actively
and demonstrate their individual abilities.
Support for employees to continue working
SFG has established in-house systems designed to support employees who are raising children to continue work-
ing, such as childcare leave, special leave, and reduced work hour system. Sony Life provides various types of
support to its employees, such as working primarily by telecommuting, depending on the job characteristics and
individual situations of each employee, and allowing employees to take a leave of absence when it becomes dif-
ficult to continue working due to the need to provide nursing care for a family member, or transfer of their spouse
to a remote location. In addition, even in cases where employees leave work due to uncontrollable circumstances,
SFG has a re-employment system in place to support a career restart, according to a change of life plans.
Promotion of women s empowerment
SFG provides career-design training for young female employees, discussion sessions on returning to work and
orientation sessions for employees returning from childcare leave, and leadership training for female leaders/man-
agers. We also provide management training for the superiors of female employees, with the aim of improving
awareness and enhancing their understanding regarding the career development of female employees.
Employment of people with disabilities
SFG has been actively promoting the employment of people with disabilities, and such employees are actively
working in various fields within the Group. Sony Life has established an in-house health care room (a massage
room) since fiscal 1996, and persons with vision impairment are now working actively across the country and con-
tributing to the promotion of employees health. In addition, Sony Life has many people with physical disabilities
assigned to each department, and they are working actively by capitalizing on their individual strengths. Sony Life
also launched an Office Support Team in April 2018 and started hiring people with mental disabilities and intellec-
tual impairment, and established Sony Life Business Partners Co., Ltd., a special subsidiary, in March 2019. Sony
Life Business Partners handles operations contracted out by each department of Sony Life, such as printing, filing,
and data entry, contributing to the productivity improvement of the entire company.
Percentage of females in management positions*
FY2018
12.4 ％

Initiative2 Work-life Balance
Policy on Work-life Balance
With an eye toward promoting corporate growth, as well as developing an environment in which employees can
Strategy and Review

feel job satisfaction and experience personal growth through their work, while also leading fulfilling lives, SFG pro-
motes productivity and efficiency improvement through the promotion of workstyle reform.
Specific Measures
Initiatives for reducing overtime work

Each Group company monitors overtime work each month, and encourages departments with heavy workloads to
review allocation of work and checks the adequate staff levels. Sony Life has designated no-overtime days twice a

month (once a week from May 2019), ensuring that employees leave work on time through announcements from
an executive to encourage going home, and turning off floor lights to make it customary to finish work on time.
Sony Life and Sony Bank are also making efforts to reduce the work hours of managers and supervisors.
for Creating Value

Expanding flexible workstyles and vacation leaves, and promoting the acquisition of vacation leaves
SFH and Sony Life have placed emphasis on self-discipline of employees since their founding, and introduced
flexible hours whereby employees set their own start and finish times. Each Group company actively promotes the
acquisition of vacation leaves, expanding vacation leave programs by providing accumulated vacation leave and
special vacation leave programs, in addition to an annual vacation leave program, and urging the acquisition of
annual vacation leave for a five-day continuous period.
Telecommuting
The Group companies are promoting the introduction and expansion of telecommuting and mobile work systems,
and supporting their employees to secure the time to enrich their lives while improving their work productivity,
through diversification of work locations and efficient allocation of time.
Corporate Section
Average monthly overtime per employee* Percentage of annual vacation leave acquired*
FY2018 21.12 hours FY2018 64.2 ％
Initiative3 Initiatives for Human Resource Development

SFG has more than 11,000 employees who are actively working in various business domains such as life insur-
ance, non-life insurance, banking, and nursing care. Each Group company has established an education and train-
ing system from a medium- to long-term perspective, in order to support employee personal growth and career
Reference Materials
development, and provides compulsory training programs according to job type and position level, as well as
elective training programs for skills enhancement and personal development, etc. In addition, SFG focuses efforts
on the training of management-level employees, who play the primary role in the cultivation of employees, and is
continuously strengthening human resource development through the expansion of training programs, etc. In addi-
tion, SFG participate in the leader training programs and female leader training programs provided for the Sony
Group s employees by Sony Corp. In this manner, SFG works on human resource development through collabora-
tion with the Sony Group.
Lifeplanner sales employees at Sony Life, who account for nearly half of the employees of SFG, take a three-
year B.T.P. (Basic Training Program) to develop the customer-first attitude and knowledge, skills and conduct
required of a professional Lifeplanner sales employee. This B.T.P. is designed to nurture Lifeplanner sales employ-
ees to listen to their customers cherished thoughts, propose reasonable life insurance to safely protect them at all
times, and provide life-long support through high-quality services, even after the contract has been executed.
* The average figures for employees of SFH, three financial subsidiaries and three nursing care business companies. For Sony Life, only head office
employees are included.

Initiatives to Strengthen Our Foundation for Creating Value The Environment
SFG recognizes that humankind faces a critical challenge in protecting the global environment. The major sub-
sidiaries have each established environmental policies, and through everyday business activities, they carry out
initiatives that give due consideration to environmental protection.
SFG s Policy on Environmental Initiatives
SFG strives to provide value to stakeholders through its business activities, and to take actions in consideration
of protecting the global environment, in all aspects of its corporate activities as a member of the Sony Group, by
observing the Sony Group Environmental Vision for realizing a sustainable society.
Use of Green Power
Sony Life became the first Japanese life insurance company to introduce a Green Power Certification System,
which enables companies to use green power in their business activities and thus reduce CO2 emis-
sions. Sony Assurance and Sony Bank adopt the Green Heat Certification System* to help reduce
CO2 emissions. Sony Bank offsets 100% of CO2 emissions caused by its power usage (excluding
the portion of power usage in outsourced operations) as a Carbon Offset Bank.
In this way, each Group company contributes to the wider use of natural sources of power such
as solar and wind power, geothermal power, and biomass. In fiscal 2018, SFG as a whole purchased
green power certificates and green heat certificates equivalent to 1,160 MWh.
* The Green Heat Certification System is a system certified by the government whereby a company can issue certificates for the environ-
mental value of heat generated from renewable energy with the approval of a third-party institution (Green Energy Certification Center),
and trade these as green heat certificates.
Acquisition of ISO14001 Certification
Sony Life, Sony Assurance and Sony Bank* have acquired ISO14001 certification, the international standard for
environmental management systems. All three companies promote energy-saving and natural resource-saving
activities such as targets for reduced energy and photocopier paper usage, and green procurement to raise the
percentage of eco-products used in office supplies.
* Includes the head offices of Sony Life and Sony Assurance, along with Sony Bank s head office and CONSULTING PLAZA. They con-
ducts regular internal environmental audits of ISO14001-certified offices, and the audit results are reported to top management.
Reducing CO2 Emissions by Switching to Paperless Contract Procedures

and Electronic Issuance of Documents
SFG has been striving to conserve paper resources and cut down on CO2 emissions related to postal mailings by
shifting to paperless documentation for certain contract procedures and transactions.
Sony Life has adopted paperless application procedures that enable customers to use electronic signatures
to complete new contract application procedures as well as various post-contract procedures, such as changing
contract contents. As a result, Sony Life has reduced the use of copier paper.
Sony Assurance has made it possible to apply for automobile insurance policies, medical insurance policies,
fire insurance policies and overseas travel insurance policies online, thereby avoiding the need for printing and
mailing of insurance application forms and other documents. Also of note, Sony Assurance promotes reduction in
the use of paper resources, exemplified by a paperless insurance certificate discount of up to ¥500 on automobile
and fire insurance premiums when customers who buy a policy online opt not to have certificates of insurance and
other documents printed and mailed.
As an Internet bank, Sony Bank promotes paperless transactions by principally providing information on web
pages and using electronic document delivery for delivering transaction slips, passbooks, explanations of products
and delivery of forms to customers.
For reference: SFG s electricity consumption and CO₂ emissions* for fiscal 2018
Total electricity consumption

3,173.5 MWh
Total CO2 emissions

(equivalent value) 1,574 t-CO2
* Includes the head offices of Sony Life and Sony Assurance, along with Sony Bank s head office and CONSULTING PLAZA.
Communication with Stakeholders
With the highest level of ethics and a strong sense of purpose, SFG seeks to become the most trusted financial ser-
vices group by invoking emotion through the power of technology and high-value-added products and services that
Strategy and Review

meet every customer s needs. SFG reflects opinions obtained through communication with stakeholders in opera-
tional improvement and quality enhancement of products and services to achieve sustainable growth and corporate
value improvement.
At SFG, feedback received from its customers in various situations is

compiled and analyzed by divisions in charge of promoting custom-
er satisfaction and raising quality. This feedback is shared with each
division within the Group and reported to management, and used to
make recommendations on operational improvements and product
and service enhancements.

P15 Customer-first Business Operation Policy (Summary)
for Creating Value

Customers
We share opinions obtained
through dialogue with share-
holders and other investors with
top management and utilize
We strive to contribute to them in developing manage-
realizing a sustainable society Local ment strategies. Top manage-
Shareholders
and environment through our communities/ ment also participates actively
business activities and social and investors in dialogue with shareholders
contribution activities.
Environment
and other investors in an effort
to further enhance corporate
Sony Financial Group value.
Corporate Section
P42
Dialogue with Shareholders
and Investors
Business By creating workplaces that allow

We seek to promote fair and Employees employees to work comfortably and
equitable transactions with busi-
partners providing training, we generate new
ness partners, including insurance value from diverse perspectives and
agencies and alliance partners. We improve productivity toward achiev-
also provide education programs for ing enhancement of corporate value.
insurance agencies. Through these
activities, we aim to achieve cor- P48 Initiatives to Strengthen Our Foundation for
porate value enhancement for both Creating Value, Human Resources
SFG and its business partners.
Reference Materials
Initiatives for Stakeholders on SFH s website,

https://www.sonyfh.co.jp/en/csr/

Corporate Section
Corporate Profile
(As of March 31, 2019)
Name Sony Financial Holdings Inc.
Established April 1, 2004
Head office 1-9-2, Otemachi, Chiyoda-ku, Tokyo, Japan
Business Management control of subsidiaries (life insurance companies, non-life insurance compa-
nies, banks and others) specified by the Insurance Business Act of Japan and the Banking
Act of Japan and all duties incidental to that role.
Number of employees
SFH: 82
(Consolidated: 11,055, Life insurance business: 8,454, Non-life insurance business: 1,303,
Banking business: 609, Others: 623, Parent: 66)
Common stock ¥19,963 million
Notes: 1. The number of employees of SFH includes 8 belonging to the life insurance business, 1 belonging to the non-life insurance business,
7 belonging to the banking business, and 66 belonging to the parent.
2. The number of employees stated in Others is the number of employees belonging to the nursing care business and venture capital
business at subsidiaries.
Organizational Chart
(As of July 1, 2019)
Sony Financial Holdings
General Meeting of Shareholders
Audit & Supervisory Board
Board of Directors
Audit Department
Executive Committee
Business Execution Departments
Sony Financial
Sony Life Sony Assurance Sony Bank Sony Lifecare
Ventures
and other Group subsidiaries

Profiles of Group Companies (Main subsidiaries)
(As of June 28, 2019)
■ Life Insurance Business

Common
Name Established Head office Business stock Share ownership
Sony Life Insurance Co., Ltd. August 10, Chiyoda-ku, Life insurance business ¥70,000 Sony Financial Holdings Inc.
1979 Tokyo, Japan million 100%
AEGON Sony Life August 29, Shibuya-ku, Life insurance business ¥21,500 Sony Life Insurance Co., Ltd.
Strategy and Review

Insurance Co., Ltd. 2007 Tokyo, Japan million 50%
AEGON International B.V.
50%
SA Reinsurance Ltd. October 29, British Bermuda Reinsurance business ¥15,900 Sony Life Insurance Co., Ltd.
2009 million 50%
AEGON International B.V.
50%
Note: As of June 28, 2019, Sony Life entered into the final agreement to acquire the remaining 50% of the issued shares in each of AEGON
Sony Life Insurance and SA Reinsurance and convert both companies into wholly-owned subsidiaries.

■ Non-life Insurance Business
Common
for Creating Value

Sony Assurance Inc. June 10, Ota-ku, Non-life insurance ¥20,000 Sony Financial Holdings Inc.
1998 Tokyo, Japan business million 100%
■ Banking Business
Common
Sony Bank Inc. April 2, Chiyoda-ku, Banking business ¥31,000 Sony Financial Holdings Inc.
Corporate Section
Sony Payment September 1, Minato-ku, Credit card settlement ¥488 Sony Bank Inc. 57%,
Services Inc. 2006 Tokyo, Japan services million Four other companies
SmartLink Network February 27, Hong Kong, Credit card settlement ¥13 Sony Payment Services Inc.
Hong Kong Limited 2013 China services million 100%
■ Other (Nursing Care Business)

Common
Sony Lifecare Inc. April 1, Shibuya-ku, Management control of ¥2,625 Sony Financial Holdings Inc.
2014 Tokyo, Japan companies handling the million 100%
nursing care business,
and other duties
Reference
incidental to that role
Lifecare Design Inc. October 5, Shibuya-ku, Planning, development ¥1,695 Sony Lifecare Inc.
1999 Tokyo, Japan and operation of nursing million 100%
care homes
Proud Life Inc. July 3, Yokohama, Planning, development ¥3 Sony Lifecare Inc.
2006 Kanagawa and operation of nursing million 100%
Prefecture, Japan care homes
■ Other (Venture Capital Business)

Common
Sony Financial Ventures Inc. July 10, Chiyoda-ku, Venture capital business ¥10 Sony Financial Holdings Inc.

Corporate Section
Stock Information
Information on Common Stock, Shares Outstanding

Increase in Increase in
Increase in Issued Total Number of Common Stock Common Stock Capital Surplus Capital Surplus
Date Shares Shares Issued (Millions of yen) (Millions of yen) (Millions of yen) (Millions of yen)
April 1, 2018 – March 31, 2019 35,470 435,062,983 35 19,963 35 195,340
Notes: 1. Increases due to the exercise of subscription rights to shares are as follows:
Increase in Issued Shares: 7,700 shares
Increase in Common Stock: ¥6 million
Increase in Capital Surplus: ¥6 million
2. Increases due to issued new shares as restricted stock compensation (third-party allocation) are as follows:
Increase in Issued Shares: 27,770 shares
Increase in Common Stock: ¥29 million
Increase in Capital Surplus: ¥29 million
The issue price and the amount added to common stock pertaining to the said issuance were as follows:
Issue price: ¥2,091 per share
Amount added to common stock: ¥1,045.5 per share
Stock Exchange Listing

The First Section of the Tokyo Stock Exchange (Securities code: 8729)
Major Shareholders
(As of March 31, 2019)
Percentage of
Number of Ownership (excluding
Name Shares Held treasury stocks)
Sony Corporation 283,050,000 65.06

The Master Trust Bank of Japan, Ltd. (Trust Account) 14,041,400 3.22
Japan Trustee Services Bank, Ltd. (Trust Account) 10,030,200 2.30
SSBTC CLIENT OMNIBUS ACCOUNT 9,432,717 2.16
BNPP NY/US RESIDENTS 705012 5,711,900 1.31
GOLDMAN, SACHS & CO. REG 4,786,330 1.10
Japan Trustee Services Bank, Ltd. (Trust Account 5) 3,178,000 0.73
Japan Trustee Services Bank, Ltd. (Trust Account 9) 2,777,100 0.63
JP MORGAN CHASE BANK 385151 2,749,319 0.63
SAJAP 2,664,400 0.61
Shareholding by Shareholder Type (As of March 31, 2019)
1.08% 21.40%
Financial instruments firms Foreign investors
Total number of shares issued

9.98%
435,062,983 Financial institutions
65.21% 2.33%
Corporations Individuals and others

Dividend Policy
Dividends
Dividend per Share 65.0 yen
62.5
60.0
55.0 55.0
Strategy and Review

40.0
30.0
25.0
20.0 20.0
15.0

FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019
(Forecast)
Note: Although a stock split was conducted during fiscal 2011, the dividend per share figures are calculated assuming that the stock split was
conducted at the beginning of fiscal 2009.
for Creating Value

Total Shareholder Return
%
FY2014 FY2015 FY2016 FY2017 FY2018
SFH 116.7 90.7 114.7 127.0 139.7
<Comparative indicator: TOPIX> <130.5> <116.7> <133.0> <152.9> <145.6>
Corporate Section
Share Price
Yen
2,500
2,000
1,500
1,000
Reference
0
1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6
2017 2018 2019

Reference
Review of Operations / Organizational Chart of Business Operations
Review of Operations
On a consolidated basis, Ordinary revenues increased 8.3% year on year, to ¥1,629.1 billion, owing to increases in ordinary
revenues from all the businesses: life insurance, non-life insurance and banking businesses. Ordinary profit increased
40.4% year on year, to ¥93.8 billion, owing to increases in ordinary profit from all the above businesses. Profit attributable
to owners of the parent was up 19.6% year on year, to ¥62.0 billion. Note that a ¥13.2 billion gain on disposal of fixed
assets from a sale of the real estate held for investment in the life insurance business, which was recorded in extraordinary
gains in the fiscal year ended March 31, 2018.
Segment results are described below.

1) Life Insurance Business
Ordinary revenues grew 8.4% year on year, to ¥1,464.3 billion, due to higher insurance premiums due to a steady rise in
the policy amount in force. Ordinary profit increased 44.4% year on year, to ¥78.2 billion, due to an increase in profit on
higher policy amount in force, a recording of gains on sale of securities in the general account, a decline in provision of
policy reserves for products with higher surrenders, and an improvement in net gains (losses) on derivative transactions
to hedge market risks for available-for-sale securities in the general account, which more than offset the effect of an
impairment loss relating to available-for-sale securities in the general account.
2) Non-life Insurance Business
Ordinary revenues rose 4.6% year on year, to ¥115.1 billion, due to an increase in net premiums written for mainstay
automobile insurance. Ordinary profit increased 4.9% year on year, to ¥6.8 billion, due to a lower expense ratio and
higher revenues, despite a rise in the loss ratio stemming from natural disaster damage and the recording of additional
policy reserves for a certain product.
3) Banking Business
Ordinary revenues rose 15.2% year on year, to ¥46.0 billion and ordinary profit grew 34.3% year on year, to ¥9.5 billion,
due mainly to increases in interest income on investment securities and on loans in line with a growing balance of mort-
gage loans.
Sony Financial Group Organizational Chart of Business Operations

Life Insurance Business

Life Insurance Business AEGON Sony Life Insurance Co., Ltd.
Sony Life Insurance Co., Ltd.
Life Insurance Business
SA Reinsurance Ltd.
Non-life Insurance Business

Sony Assurance Inc.
Banking Business Banking Business

Sony Financial Banking Business
Sony Corporation Sony Payment SmartLink Network
Holdings Inc. Sony Bank Inc.
Services Inc. Hong Kong Limited

Lifecare Design Inc.
Consolidated subsidiaries Sony Lifecare Inc.
Affiliated companies accounted for Proud Life Inc.
under the equity method
Sales and referrals of the others’ products
Shareholding Venture Capital Business Venture Capital Business
Sony Financial Ventures Inc. SFV · GB L.P.

Financial Highlights
■ Sony Financial Holdings (Consolidated)

Millions of yen
2015 2016 2017 2018 2019

Ordinary revenues 1,352,325 1,362,044 1,381,667 1,503,630 1,629,182
Ordinary profit 90,062 71,103 66,326 66,843 93,856
Strategy and Review

Profit attributable to owners of the parent 54,419 43,355 41,621 51,895 62,074
Comprehensive income 90,707 71,105 21,433 52,207 57,415
Total assets 9,545,868 10,352,114 11,471,845 12,401,446 13,468,215
Net assets 550,672 604,377 601,139 625,406 656,846
Consolidated capital adequacy ratio
(Domestic standard) (Note 1) (Note 2) 11.91% 10.70% 14.39% 18.58% 18.11%
Consolidated solvency margin ratio (Note 1) 1,634.9% 1,637.1% 1,632.9% 1,748.7% 1,726.3%

■ Sony Life (Non-consolidated)
for Creating Value

Millions of yen
2015 2016 2017 2018 2019

Ordinary revenues 1,223,827 1,230,141 1,243,739 1,351,076 1,464,218
Ordinary profit 79,665 60,792 60,180 56,338 79,812
Net income 42,524 37,096 35,185 45,134 49,602
Total assets 7,301,350 8,035,408 8,873,613 9,567,689 10,380,148
Net assets 432,526 482,195 473,589 492,787 513,930
Non-consolidated solvency margin ratio (Note 1) 2,555.0% 2,722.8% 2,568.8% 2,624.3% 2,590.5%
Corporate Section
■ Sony Assurance
Millions of yen
2015 2016 2017 2018 2019

Ordinary revenues 93,022 96,905 102,333 110,092 115,102
Ordinary profit 4,209 4,680 4,996 6,574 6,897
Net income 2,233 2,586 3,515 4,821 4,999
Total assets 157,919 172,323 186,537 204,362 219,643
Net assets 24,741 28,305 29,409 33,189 34,798
Non-consolidated solvency margin ratio (Note 1) 629.6% 693.5% 730.8% 782.1% 813.0%
Reference
■ Sony Bank (Non-consolidated)

Millions of yen
2015 2016 2017 2018 2019

Ordinary revenues 35,714 34,892 35,105 36,270 41,707
Ordinary profit 7,298 5,857 4,634 6,557 8,698
Net income 4,634 3,912 3,176 4,474 6,025
Total assets 2,062,525 2,126,564 2,424,236 2,635,028 2,860,925
Net assets 77,064 77,428 81,332 85,729 87,279
Non-consolidated capital adequacy ratio
(Domestic standard) (Note 1) (Note 2) 10.65% 9.89% 9.75% 10.45% 9.58%
Notes: 1. Calculated based on rules in force at the respective dates.

2. Capital adequacy ratio has been calculated by applying foundation internal ratings-based (FIRB) approach from March 31, 2017.

Reference
SFH Consolidated Financial Statements
Consolidated Balance Sheets

Sony Financial Holdings Inc.
As of March 31, 2018 and 2019
Millions of yen
2018 2019
Assets
Cash and due from banks 327,633 415,894
Call loans and bills bought 65,500 93,700
Monetary claims purchased 5,378 4,916
Money held in trust 291,582 291,324
Securities 9,581,206 10,373,188
Loans 1,785,877 1,942,546
Tangible fixed assets 106,051 104,128
Land 63,106 63,106
Buildings 32,468 30,899
Leased assets 6,074 6,536
Construction in progress 5 77
Other tangible fixed assets 4,397 3,508
Intangible fixed assets 35,684 43,909
Software 35,059 43,327
Goodwill 583 551
Leased assets 0 ̶
Other intangible fixed assets 40 30
Due from reinsurers 934 1,341
Foreign exchanges 9,346 8,471
Other assets 168,736 159,361
Net defined benefit asset 3,426 3,476
Deferred tax assets 21,242 27,556
Reserve for possible loan losses (1,152) (1,602)
Total Assets 12,401,446 13,468,215

Millions of yen
2018 2019
Liabilities
Strategy and Review

Policy reserves and others 8,763,349 9,479,071
Reserve for outstanding claims 74,712 78,285
Policy reserves 8,683,153 9,396,241
Reserve for policyholders dividends 5,484 4,544
Due to agencies 1,873 2,073
Due to reinsurers 5,563 5,769
Deposits 2,159,246 2,302,313

Call money and bills sold 96,000 130,611
Borrowed money 173,944 203,871
for Creating Value

Foreign exchanges 228 244
Bonds payable 20,000 20,000
Other liabilities 470,501 578,477
Reserve for employees bonuses 3,906 4,377
Net defined benefit liability 33,179 34,081
Reserve under the special laws 48,135 50,343
Reserve for price fluctuations 48,135 50,343
Deferred tax liabilities 0 24
Corporate Section
Deferred tax liabilities on land revaluation 109 109
Total Liabilities 11,776,039 12,811,368
Net Assets
Shareholders equity
Common stock 19,927 19,963
Capital surplus 191,157 191,193
Retained earnings 283,911 319,886
Treasury stock (55) (55)
Total shareholders equity 494,941 530,987
Reference
Accumulated other comprehensive income

Net unrealized gains (losses) on available-for-sale securities, net of taxes 133,991 128,800
Net deferred gains (losses) on hedging instruments, net of taxes (902) (1,077)
Land revaluation, net of taxes (2,439) (2,439)
Remeasurements of defined benefit plans, net of taxes (1,929) (1,470)
Total accumulated other comprehensive income 128,719 123,812
Subscription rights to shares 97 149
Non-controlling interests 1,648 1,896
Total Net Assets 625,406 656,846
Total Liabilities and Net Assets 12,401,446 13,468,215

Reference
Consolidated Statements of Income and Consolidated Statements of Comprehensive Income

For the years ended March 31, 2018 and 2019
Millions of yen
(1) Consolidated Statements of Income 2018 2019
Ordinary Revenues 1,503,630 1,629,182
Ordinary Revenues from the Life Insurance Business 1,347,762 1,461,632
Income from insurance premiums 1,057,411 1,134,048
Insurance premiums 1,054,867 1,130,676
Ceded reinsurance commissions 2,544 3,372
Investment income 242,703 278,950
Interest income and dividends 157,276 166,953
Income from money held in trust, net 4,490 4,490
Gains on trading securities, net 2 ̶
Gains on sale of securities 0 6,107
Gains on redemption of securities 1 ̶
Foreign exchange gains, net ̶ 13,455
Other investment income 1 ̶
Gains on separate accounts, net 80,931 87,943
Other ordinary income 47,646 48,633
Ordinary Revenues from the Non-life Insurance Business 110,091 115,101
Underwriting income 108,316 113,173
Net premiums written 108,253 113,101
Interest and dividends on deposits of premiums 62 72
Investment income 1,731 1,857
Interest income and dividends 1,324 1,372
Gains on sale of securities 470 557
Transfer to interest and dividends on deposits of premiums (62) (72)
Other ordinary income 43 69
Ordinary Revenues from the Banking Business 39,712 45,766
Interest income 28,344 31,926
Interest income on loans 17,064 17,473
Interest income and dividends on securities 11,204 14,382
Interest income on call loans and bills bought 2 1
Interest income on deposits with banks 63 62
Other interest income 9 7
Fees and commissions 6,751 9,398
Other operating income 3,823 3,926
Gains on foreign exchange transactions, net 3,456 3,599
Others 366 326
Other ordinary income 794 515
Other 6,064 6,681
Other ordinary income 6,064 6,681

Millions of yen
2018 2019
Ordinary Expenses 1,436,787 1,535,325
Strategy and Review

Ordinary Expenses from the Life Insurance Business 1,296,417 1,386,074
Insurance claims and other payments 436,538 457,252
Insurance claims 92,342 92,997
Annuity payments 12,566 13,489
Insurance benefits 119,294 131,824
Surrender payments 199,263 204,351
Other payments 3,314 3,659

Reinsurance premiums 9,756 10,929
Provision for policy reserves and others 638,343 704,780
for Creating Value

Provision for reserve for outstanding claims 2,211 2,433
Provision for policy reserves 636,131 702,346
Interest portion of reserve for policyholders dividends 0 0
Investment expenses 32,889 24,650
Interest expenses 151 1,604
Losses on trading securities, net ̶ 126
Losses on sale of securities 0 34
Losses on valuation of securities ̶ 4,026
Corporate Section
Losses on redemption of securities 2 ̶
Losses on derivatives, net 11,403 13,925
Foreign exchange losses, net 15,280 ̶
Provision for reserve for possible loan losses 23 329
Depreciation of real estate for rent and others 1,680 1,599
Other investment expenses 4,346 3,003
Operating expenses 139,420 146,776
Other ordinary expenses 49,226 52,614
Ordinary Expenses from the Non-life Insurance Business 102,798 107,413
Underwriting expenses 73,943 77,925
Reference
Net losses paid 52,482 56,608

Loss adjustment expenses 8,067 8,220
Net commission and brokerage fees 1,295 1,214
Provision for reserve for outstanding losses and claims 1,194 1,139
Provision for underwriting reserves 10,903 10,741
Investment expenses 2 1
Losses on sale of securities ̶ 0
Other investment expenses 2 1
Operating, general and administrative expenses 28,848 29,482
Other ordinary expenses 4 4
(Continued on next page)

Reference
Consolidated Statements of Income (Continued) Millions of yen

2018 2019
Ordinary Expenses from the Banking Business 30,428 34,135
Interest expenses 7,656 8,566
Interest expenses on deposits 5,320 6,744
Interest expenses on call money and bills sold (73) 88
Interest on payables under repurchase agreements ̶ 312
Interest on borrowed money 0 0
Interest expenses on bonds 40 12
Interest expenses on interest rate swaps 2,360 1,400
Other interest expenses 8 7
Fees and commissions 4,676 5,883
Other operating expenses 105 485
General and administrative expenses 17,733 18,786
Other ordinary expenses 257 414
Other 7,141 7,702
Other ordinary expenses 7,141 7,702
Ordinary Profit 66,843 93,856
Extraordinary Gains 13,258 0
Gains on disposal of fixed assets 13,258 0
Extraordinary Losses 2,180 2,367
Losses on disposal of fixed assets 187 92
Impairment losses 2 67
Provision for reserve under the special laws 1,953 2,207
Provision for reserve for price fluctuations 1,953 2,207
Others 36 ̶
Provision for Reserve for Policyholders Dividends 3,271 2,146
Income Before Income Taxes 74,650 89,343
Income Taxes-Current 29,008 31,871
Income Taxes-Deferred (6,344) (4,853)
Total Income Taxes 22,664 27,018
Profit 51,985 62,325
Profit Attributable to Non-controlling Interests 90 250
Profit Attributable to Owners of the Parent 51,895 62,074
Millions of yen
(2) Consolidated Statements of Comprehensive Income 2018 2019
Profit 51,985 62,325
Other Comprehensive Income
Net unrealized gains (losses) on available-for-sale securities, net of taxes (857) (5,215)
Net deferred gains (losses) on hedging instruments, net of taxes 251 (174)
Remeasurements of defined benefit plans, net of taxes 827 456
Share of other comprehensive income of affiliates accounted for using equity method ̶ 23
Total other comprehensive income 221 (4,909)
Comprehensive Income 52,207 57,415
Details:
Comprehensive income attributable to owners of the parent 52,116 57,167
Comprehensive income attributable to non-controlling interests 91 248

Consolidated Statements of Changes in Net Assets
Millions of yen
2018
Shareholders equity
Strategy and Review

Total
Common Capital Retained Treasury
shareholders
stock surplus earnings stock
equity
Balance at the beginning of
the period 19,900 195,277 255,062 (81) 470,157
Changes during the period
Issuance of new shares 27 27 ̶ ̶ 55
Dividends from surplus ̶ ̶ (23,922) ̶ (23,922)
Profit attributable to owners
̶ ̶ 51,895 ̶ 51,895

of the parent
Disposal of treasury shares ̶ (5) ̶ 26 21
Transfer of loss on disposal
of treasury shares ̶ 5 (5) ̶ ̶
for Creating Value

Reversal of land revaluation ̶ ̶ 973 ̶ 973
Adjustments due to change
of scope of consolidation ̶ ̶ (92) ̶ (92)
Change in ownership
interest of parent due to
transactions with non- ̶ (4,147) ̶ ̶ (4,147)
controlling interests
Net changes of items other
than shareholders equity ̶ ̶ ̶ ̶ ̶
Total changes during the period 27 (4,119) 28,849 26 24,784
Balance at the end of the period 19,927 191,157 283,911 (55) 494,941
Corporate Section
Millions of yen
2018
Net unrealized
gains (losses) Net deferred Remeasure- Total
on available- gains (losses) ments of accumulated
for-sale on hedging Land defined other Subscription Non-
securities, instruments, revaluation, benefit plans, comprehensive rights to controlling Total net
net of taxes net of taxes net of taxes net of taxes income shares interests assets
the period 134,849 (1,154) (1,465) (2,756) 129,472 49 1,460 601,139
Reference
Issuance of new shares ̶ ̶ ̶ ̶ ̶ ̶ ̶ 55

Dividends from surplus ̶ ̶ ̶ ̶ ̶ ̶ ̶ (23,922)
of the parent ̶ ̶ ̶ ̶ ̶ ̶ ̶ 51,895
Disposal of treasury shares ̶ ̶ ̶ ̶ ̶ ̶ ̶ 21
Transfer of loss on disposal
of treasury shares ̶ ̶ ̶ ̶ ̶ ̶ ̶ ̶
Reversal of land revaluation ̶ ̶ ̶ ̶ ̶ ̶ ̶ 973
Adjustments due to change
of scope of consolidation ̶ ̶ ̶ ̶ ̶ ̶ ̶ (92)
Change in ownership
interest of parent due to
transactions with non- ̶ ̶ ̶ ̶ ̶ ̶ ̶ (4,147)
controlling interests
than shareholders equity (857) 251 (973) 827 (752) 48 187 (516)
Total changes during the period (857) 251 (973) 827 (752) 48 187 24,267
Balance at the end of the period 133,991 (902) (2,439) (1,929) 128,719 97 1,648 625,406
(Continued on next page)

Reference
Consolidated Statements of Changes in Net Assets (Continued) Millions of yen

2019
Shareholders equity
Total
Common Capital Retained Treasury
shareholders
stock surplus earnings stock
equity

the period
19,927 191,157 283,911 (55) 494,941
Issuance of new shares 35 35 ̶ ̶ 71

Dividends from surplus ̶ ̶ (26,099) ̶ (26,099)
̶ ̶ 62,074 ̶ 62,074
of the parent
̶ ̶ ̶ ̶ ̶
than shareholders equity
Total changes during the period 35 35 35,975 ̶ 36,046

Balance at the end of the period 19,963 191,193 319,886 (55) 530,987
Millions of yen
2019
Net unrealized
gains (losses) Net deferred Remeasure- Total
on available- gains (losses) ments of accumulated
for-sale on hedging Land defined other Subscription Non-
securities, instruments, revaluation, benefit plans, comprehensive rights to controlling Total net
net of taxes net of taxes net of taxes net of taxes income shares interests assets

the period
133,991 (902) (2,439) (1,929) 128,719 97 1,648 625,406
Issuance of new shares ̶ ̶ ̶ ̶ ̶ ̶ ̶ 71

Dividends from surplus ̶ ̶ ̶ ̶ ̶ ̶ ̶ (26,099)
̶ ̶ ̶ ̶ ̶ ̶ ̶ 62,074
of the parent
(5,191) (174) ̶ 458 (4,907) 52 248 (4,606)
than shareholders equity
Total changes during the period (5,191) (174) ̶ 458 (4,907) 52 248 31,439
Balance at the end of the period 128,800 (1,077) (2,439) (1,470) 123,812 149 1,896 656,846

Consolidated Statements of Cash Flows
Millions of yen
2018 2019
Cash flows from operating activities
Strategy and Review

Income before income taxes 74,650 89,343
Depreciation of real estate for rent and others 1,680 1,599
Depreciation and amortization 11,828 11,297
Impairment losses 2 67
Amortization of goodwill 32 32
Increase (decrease) in reserve for outstanding claims 3,405 3,573
Increase (decrease) in policy reserve 647,035 713,088
Interest portion of reserve for policyholders dividends 0 0
Provision for (reversal of) reserve for policyholders dividends 3,271 2,146
Increase (decrease) in reserve for possible loan losses (140) 449
Increase (decrease) in net defined benefit liability 2,363 1,630
Increase (decrease) in reserve for directors retirement benefits (176) ̶

Increase (decrease) in reserve for price fluctuations 1,953 2,207
Interest income and dividends (186,943) (200,253)
(Gains) losses on securities (80,057) (94,790)
Interest expenses 8,327 10,698
for Creating Value

Losses (gains) on derivatives 11,403 13,925
Exchange (gains) losses 23,489 (17,258)
(Gains) losses on disposal of tangible fixed assets (13,283) 78
Equity in (gains) losses of affiliates 2,338 1,748
Net (increase) decrease in loans (56,745) (147,727)
Net increase (decrease) in deposits 87,987 143,031
Net increase (decrease) in borrowed money (excluding subordinated borrowings) 80,000 30,000
Net increase (decrease) in call money and bills sold 26,000 54,902
Net (increase) decrease in call loans and bills bought (4,805) 461
Net (increase) decrease in foreign exchange (assets) (2,077) 874
Net increase (decrease) in foreign exchange (liabilities) 119 16
Others, net 15,506 21,467
Subtotal 657,168 642,611
Corporate Section
Interest and dividends received 197,007 205,869
Interest paid (8,484) (10,221)
Policyholders dividends paid (3,517) (3,086)
Income taxes paid (22,451) (32,251)
Net cash provided by (used in) operating activities 819,721 802,921
Cash flows from investing activities
Net (increase) decrease in deposits 5 ̶
Investments in money held in trust (101) (1,044)
Proceeds from money held in trust 6,532 4,522
Purchases of securities (1,104,737) (1,219,208)
Proceeds from sale and redemption of securities 427,925 526,015
Investments in loans (60,315) (63,716)
Collections of loans 28,761 30,341
Net gains (losses) from the settlement of derivative financial instruments (22,997) 7,389
Net increase (decrease) in collateral for securities lending transactions (6,719) 27,166
Others, net 32,553 48,264
Total of net cash provided by (used in) investment transactions (699,092) (640,270)
Reference
Total of net cash provided by (used in) operating activities and investment transactions 120,629 162,651
Purchases of tangible fixed assets (2,049) (1,255)
Proceeds from sales of tangible fixed assets 36,700 1
Purchases of intangible fixed assets (12,481) (17,794)
Purchase of securities of non-consolidated subsidiaries (339) (50)
Purchase of securities of affiliates (3,450) (300)
Others, net (132) (147)
Net cash provided by (used in) investing activities (680,845) (659,815)
Cash flows from financing activities
Proceeds from debt borrowing 5,266 4,640
Repayments of debt (5,133) (4,712)
Cash dividends paid (23,921) (26,095)
Proceeds from issuance of bonds 19,938 ̶
Payments for redemption of bonds (10,000) ̶
Payments from changes in ownership interests in subsidiaries that do not result in change in scope of consolidation (171) ̶
Others, net (474) (476)
Net cash provided by (used in) financing activities (14,496) (26,645)
Effect of exchange rate changes on cash and cash equivalents (2) 0
Net increase (decrease) in cash and cash equivalents 124,377 116,461
Increase (decrease) in cash and cash equivalents resulting from change of scope of consolidation 373 ̶
Cash and cash equivalents at the beginning of the period 268,381 393,133
Cash and cash equivalents at the end of the period 393,133 509,594
Note: The above Consolidated Statements of Cash Flows have been prepared based on Article 210-10 of Ordinance for Enforcement of
the Insurance Business Act of Japan.
Reference
Segment Information
1 Outline of Reportable Segments

The Sony Financial Group s reportable segments are components of the Group whose operating results are regularly reviewed
by the Board of Directors to make decisions about resources to be allocated to the segments and assess their performance,
for which discrete financial information is available.
SFH is the financial holding company of Sony Life Insurance Co., Ltd., Sony Assurance Inc., Sony Bank Inc., Sony Lifecare
Inc., and Sony Financial Ventures Inc., and pursues financial group strategies. The subsidiaries make their own business plans
and engage in business activities from which they may earn revenues and incur expenses, under the Insurance Business Law
of Japan, the Banking Law of Japan, and other regulations.
The Sony Financial Group consists of three reportable segments: the life insurance business, the non-life insurance business
and the banking business.
The life insurance business consists of Sony Life Insurance Co., Ltd., AEGON Sony Life Insurance Co., Ltd. and SA Re-
insurance Ltd.
The non-life insurance business consists of Sony Assurance Inc.
The banking business consists of Sony Bank Inc., Sony Payment Services Inc. and SmartLink Network Hong Kong
Limited.
2 Calculation Method for Amounts of Ordinary Revenues, Profit, Assets, Liabilities and
Other Items by Each Reportable Segment
Accounting of reported business segments is roughly the same as described in page 10 through page 12 (Notes to the
Consolidated Financial Statements) of the Financial Data Book.
Intersegment ordinary revenues are based on third-party transaction prices.
3 Information on Amounts of Ordinary Revenues, Profit, Assets, Liabilities and Other

Items by Each Reportable Segment
Millions of yen
2018
Reportable Segments
Life Insurance Non-life Insurance Banking Other
Business Business Business Total (Note 1) Total
Ordinary revenues (Note 2)
(1) External customers 1,347,762 110,091 39,712 1,497,566 6,064 1,503,630
(2) Intersegment 3,462 1 221 3,685 ̶ 3,685
Total 1,351,225 110,092 39,934 1,501,251 6,064 1,507,316
Segment profit 54,148 6,574 7,146 67,869 (1,077) 66,792
Segment assets 9,566,063 204,395 2,651,162 12,421,622 13,532 12,435,155
Other
Depreciation (Note 3) 7,147 3,927 2,458 13,532 616 14,148
Interest income and dividends 157,743 1,324 28,344 187,411 0 187,411
Interest expenses 151 ̶ 7,731 7,883 516 8,400
Equity in earnings (losses) of affiliates (2,338) ̶ ̶ (2,338) ̶ (2,338)
Investments in equity-method affiliates 12,245 ̶ ̶ 12,245 ̶ 12,245
Increase in tangible fixed assets 9,511 2,660 4,709 16,882 930 17,812
and intangible fixed assets (Note 4)
Notes: 1. Other represents the nursing care business, which is a business segment not included in reportable segments.
2. Ordinary revenues stated herein are equivalent to net sales of a regular entity.
3. Depreciation includes amortization of long-term prepaid expenses, etc.
4. Increase in tangible fixed assets and intangible fixed assets includes an increase in long-term prepaid expenses, etc.
Millions of yen
2019
Reportable Segments
Life Insurance Non-life Insurance Banking Other
Business Business Business Total (Note 1) Total
Ordinary revenues (Note 2)
(1) External customers 1,461,632 115,101 45,766 1,622,500 6,681
1,629,182
(2) Intersegment 2,735 1 252 2,988 ̶ 2,988
Total 1,464,367 115,102 46,018 1,625,488 6,681 1,632,170
Segment profit 78,213 6,897 9,597 94,708 (1,021) 93,687
Segment assets 10,380,274 219,672 2,878,879 13,478,825 22,636 13,501,462
Other
Depreciation (Note 3) 7,847 2,457 2,489 12,794 631 13,425
Interest income and dividends 166,953 1,372 31,926 200,252 2 200,255
Interest expenses 1,604 ̶ 8,643 10,248 507 10,755
Equity in earnings (losses) of affiliates (1,748) ̶ ̶ (1,748) ̶ (1,748)
Investments in equity-method affiliates 10,969 ̶ ̶ 10,969 ̶ 10,969
Increase in tangible fixed assets
and intangible fixed assets (Note 4) 9,496 5,790 3,977 19,264 1,141 20,406
Notes: 1. Other represents the nursing care business and the venture capital business, which are business segments not included in reportable segments.
2. Ordinary revenues stated herein are equivalent to net sales of a regular entity.
3. Depreciation includes amortization of long-term prepaid expenses, etc.
4. Increase in tangible fixed assets and intangible fixed assets includes an increase in long-term prepaid expenses, etc.

4 Differences between the Reportable Segments Total and the Amount in the Consolidated
Financial Statements, and the Main Components of Such Differences (Matters Related to
Reconciliation)
1 Total ordinary revenues of reportable segments and ordinary revenues in the consolidated
statements of income
Strategy and Review

Millions of yen
2018 2019
Totals of reportable segments 1,501,251 1,625,488
Other 6,064 6,681
Adjustments for intersegment transactions (3,685) (2,988)
Ordinary revenues in statement of income 1,503,630 1,629,182
2 Total profit of reportable segments and ordinary profit in the consolidated statements of income
Millions of yen

2018 2019
Totals of reportable segments 67,869 94,708
for Creating Value

Other (1,077) (1,021)
Adjustments for intersegment transactions (133) ̶
Amount not allocated to reportable segments 185 169
Ordinary profit in statement of income 66,843 93,856
3 Total assets of reportable segments and the amount of assets in the consolidated balance sheets
Millions of yen
2018 2019
Totals of reportable segments 12,421,622 13,478,825
Other 13,532 22,636
Corporate Section
Adjustments for intersegment transactions (70,927) (66,653)
Amount not allocated to reportable segments 37,218 33,406
Assets in balance sheets 12,401,446 13,468,215
4 Total other items of reportable segments and the amount of the items equivalent thereto in the
consolidated financial statements
Millions of yen
Amounts in the
Reportable Segments Consolidated Financial
Total Other Reconciliation Statements
2018 2019 2018 2019 2018 2019 2018 2019
Depreciation 13,532 12,794 616 631 38 40 14,187 13,466
Reference
Interest income and dividends 187,411 200,252 0 2 (467) (0) 186,944 200,255
Interest expenses 7,883 10,248 516 507 (74) (77) 8,325 10,678
Equity in earnings (losses) of
affiliates (2,338) (1,748) ̶ ̶ ̶ ̶ (2,338) (1,748)
Investments in affiliates 12,245 10,969 ̶ ̶ ̶ ̶ 12,245 10,969
Increase in tangible fixed assets
16,882 19,264 930 1,141 10 69 17,822 20,475
and intangible fixed assets

Reference
Other Financial Data

■ SFH
Risk-monitored Loans
Millions of yen
As of March 31, 2018 2019
Category
Bankrupt loans 91 180
Non-accrual delinquent loans 1,075 1,220
Past-due loans (3 months or more) ̶ ̶
Restructured loans 842 800

Total 2,009 2,201
Consolidated Solvency Margin Ratio

Millions of yen
As of March 31, 2018 2019
(A) Total consolidated solvency margin 1,381,575 1,481,117
Common stock, etc. 470,030 505,148
Reserve for price fluctuations 48,135 50,343
Contingency reserve 90,025 98,736
Catastrophe reserve 20,970 24,636
General reserve for possible loan losses 416 483
Net unrealized gains on available-for-sale securities and net deferred gains or losses on
163,989 157,692
hedging instruments, net of taxes (before tax deductions) x 90% (100% if losses)
Net unrealized gains on real estate x 85% (100% if losses) 30,023 51,154
Total amount of unrecognized net actuarial gain (loss) and unrecognized prior service cost
(2,724) (2,090)
(before subtracting tax effects)
Amount excluded from deferred tax assets ̶ ̶
Unallotted portion of reserve for policyholders dividends 377 245

Deferred tax assets (after deducting amount excluded) 90,359 95,400
Subordinated debt and surplus components of premium reserve 482,261 510,406
Total solvency margin of small-amount short-term insurers ̶ ̶
Deductible items 12,290 11,040

(B) Total consolidated risk [{(R1 +R5 )+R8+R9} +(R2+R3+R7) ]+R4+R6
2 2 2 2
158,006 171,586
Insurance risk (R1) 24,337 24,574
Ordinary insurance risk (R5) 12,395 13,181
Major catastrophe risk (R6) 1,036 1,105
Third-sector insurance risk (R8) 8,587 8,527
Insurance risk of small-amount short-term insurers (R9) ̶ ̶
Assumed interest rate risk (R2) 32,566 34,186

Minimum guarantee risk (R7) 20,137 22,141
Asset management risk (R3) 93,730 103,438
Business management risk (R4) 6,199 6,618
Consolidated solvency margin ratio (A)/{(1/2)x(B)} x 100 1,748.7% 1,726.3%
Notes: 1. Figures are calculated in accordance with Article 210, Paragraph 11-3 and Paragraph 11-4 of the Ordinance of Enforcement of the
Insurance Business Act of Japan, and FSA Notification No. 23 (2011).
2. Minimum guarantee risk is calculated based on the standardized method.

■ Sony Life (Non-consolidated)
Billions of yen
As of March 31, 2018 2019
Category
Bankrupt loans ̶ ̶
Strategy and Review

Non-accrual delinquent loans ̶ 0.0
Past-due loans (3 months or more) ̶ ̶
Restructured loans ̶ ̶
Total ̶ 0.0

■ Sony Assurance
for Creating Value

The company does not have any risk-monitored loans (loans for which repayment conditions are not ordinary).
■ Sony Bank (Non-consolidated)
Corporate Section
Billions of yen
As of March 31, 2018 2019
Category
Bankrupt loans 0.0 0.1
Non-accrual delinquent loans 1.0 1.2
Past-due loans (3 months or more) ̶ ―
Restructured loans 0.8 0.8
Total 1.9 2.2
Reference

Reference
Relationship with Parent Company, Sony Corporation

As described in the Basic Policy on Corporate Governance (please see page 35), SFH is a listed subsidiary of
Sony Corporation. Accordingly, SFH maintains managerial independence from its parent company and strives to
ensure highly transparent management.
● Capital Relationship ● Using the Sony Trade Name and

SFH is a financial holding company, established in Trademark
April 2004 as a corporate spin-off from Sony Corpo- SFH and Group companies have entered into royalty
ration. In October 2007, SFH s shares were listed on agreements with Sony Corporation for the use of the
the First Section of the Tokyo Stock Exchange with Sony trade name and trademark. However, these
the initial public offering conducted in Japan and agreements can be rescinded by Sony Corporation
overseas. Sony Corporation later made additional under certain conditions, such as its share of voting
purchases of SFH shares, bringing its shareholding rights in SFH falling below a majority, or SFH s
to 65.06% (excluding treasury stocks) as of March percentage ownership of the voting rights of SFG
31, 2019. As a result, regardless of the intentions companies dropping. Furthermore, Sony Financial
and interests of other shareholders, Sony Corpora- Group companies pay royalty fees to Sony Corpora-
tion may have an impact on all matters requiring tion based on these agreements. The amount paid in
shareholder approval such as the appointment and fiscal 2018 was ¥2,862 million and the amount of
dismissal of SFH directors and audit & supervisory these royalty fees has no material impact on the
board members, mergers and other organizational management base of SFG.
restructuring, material asset and business transfers, SFG believes that the use of the Sony trade
amendments to the Articles of Incorporation and the name and trademark confers certain advantages,
payment of dividends. including stronger brand recognition, enhanced
trustworthiness and higher employee motivation and
● Ensuring Independence in Business awareness.
Activities
Because SFG s business operations have a tenuous ● Transactions with Sony Corporation
connection with the Sony Group s business domains SFH is a listed subsidiary of Sony Corporation. For
except for Financial Services, and because SFG this reason, SFH has set out a Policy Concerning
operates its business primarily in accordance with Measures to Protect Minority Shareholders in Trans-
the Insurance Business Act and the Banking Act of actions with the Controlling Shareholder to protect
Japan, under the supervision of the Financial Ser- the interests of minority shareholders.
vices Agency (FSA) of Japan, SFH believes that SFG Policy Concerning Measures to Protect Minority
conducts its business with a certain degree of inde- Shareholders in Transactions with Sony Corpora-
pendence from the Sony Group. In addition, Sony tion (Controlling Shareholder) can be viewed at the
Corporation, which has obtained approval from FSA following SFH s website:
to remain a major SFH shareholder, recognizes and https://www.sonyfh.co.jp/en/company/
respects SFH s corporate philosophy. management.html
● Personnel Relationship
SFH s three directors and one audit & supervisory
board member serve concurrently as executives /
employees of the Sony Group. Moreover, Sony
Corporation has seconded five employees to SFH.
Based on the above-stated Ensuring Independence
in Business Activities, SFH believes that concurrent
directors and audit & supervisory board member are
positioned to make independent management deci-
sions. From the standpoint of further enhancing inde-
pendence from the parent company, SFH has
appointed four outside directors and two outside
audit & supervisory board members who have no
special relationship with the Sony Group and desig-
nated them as independent directors and/or inde-
pendent audit & supervisory board members based
on rules set forth by the Tokyo Stock Exchange regu-
lations, respectively.

Financial Data Book Contents
Please visit SFH s website to view the Financial Data Book.

2019
Financial Data Book
Detailed financial data for each operating company is presented in
Strategy and Review

April 1, 2018 March 31, 2019
the Financial Data Book and it is only disclosed on the website.
005_0344787451908.indd 2 2019/08/22 15:44:55

https://www.sonyfh.co.jp/en/financial_info/annualreport
SFH Financial Data (Consolidated) Sony Assurance Financial Data

Principal Indicators of Operating Performance Balance Sheets
Consolidated Balance Sheets Statements of Income
Consolidated Statements of Income and Statements of Changes in Net Assets

Consolidated Statements of Comprehensive Income Statements of Cash Flows
Consolidated Statements of Changes in Net Assets 1. Loans by Borrower Category
Consolidated Statements of Cash Flows 2. Risk-monitored Loans
for Creating Value

Notes to the Consolidated Financial Statements 3. Assets and Liabilities
4. Profit and Loss
Sony Life Financial Data (Non-consolidated) 5. Fair Value Information, etc.
Balance Sheets
Statements of Income Sony Assurance Performance Indicators
Statements of Changes in Net Assets 1. Principal Indicators of Operating Performance
Statements of Cash Flows 2. Underwriting Performance
1. Loans by Borrower Category 3. Asset Management
2. Risk-monitored Loans 4. Non-consolidated Solvency Margin Ratio
Corporate Section
3. Accounting Indicators
4. Reconciliation to Core Profit and Sony Bank Financial Data (Consolidated)
Non-consolidated Ordinary Profit
Consolidated Balance Sheets
5. Fair Value Information on Securities (General Account)
Consolidated Statements of Income
6. Fair Value Information on Securities (Company Total)
Consolidated Statements of Comprehensive Income
Consolidated Statements of Changes in Net Assets
Sony Life Performance Indicators
Consolidated Statements of Cash Flows
(Non-consolidated)
1. Key Performance Indicators for Past Five Years
Sony Bank Financial Data (Non-consolidated)
2. Key Performance Indicators
Balance Sheets
3. Indicators for Insurance Policies
Statements of Income
4. Indicators Related to Asset Management
Reference
(General Account) Statements of Changes in Net Assets

5. Status of Insurance Claims Paying Ability 1. Loans by Borrower Category
6. Balance of Separate Account Assets 2. Risk-monitored Loans
7. Investment Progress of Separate Account Assets in 3. Profit and Loss
Individual Variable Life Insurance and Individual Variable 4. Fair Value Information
Annuities
8. Status of Individual Variable Life Insurance and Individual Sony Bank Performance Indicators
Variable Annuities
(Non-consolidated)
9. Number of Agencies
1. Key Performance Indicators
10. Number of Employees and Recruits
2. Status of Operations (Deposits)
11. Average Salary
3. Status of Operations (Loans)
4. Status of Operations (Securities)
MCEV Results for Sony Life

MCEV Results for Sony Life as of March 31, 2019

Reference
Glossary (in Alphabetical Order)
A Catastrophe reserve
A type of policy reserve, under which,
affected by interest rate fluctuations.
While a variety of types and methods for
pursuant to the provisions of the Insur- calculating duration exists, a method
ALM (asset liability management) expressing the weighted average
A method for maximizing and stabilizing ance Business Act of Japan, non-life
insurance companies are required to maturity of the cash flow in question is
net asset value, which is calculated by
accumulate each fiscal year as an relatively widely used.
deducting the value of liabilities from the
value of assets, through the comprehen- amount calculated based on premium
sive grasp and management of assets
and liabilities in consideration of their
income to cover losses due to cata-
strophic events.
E
special characteristics. In consideration of the special need Earned/incurred (E.I.) loss ratio
for the non-life insurance business to An indicator that represents the loss ratio
Annualized insurance premiums cover a wide range of risks, the catastro- incurred during the current period that
An indicator of the approximate annual phe reserve acts as a provision against takes into account the provision and
premium income from existing policies, the risk of large insurance claims result- reversal of reserve for outstanding losses
which is used as a performance indica- ing from earthquakes, typhoons and and ordinary underwriting reserves
tor. Annualized insurance premiums are other catastrophic events. It is structured calculated using the following formula:
calculated by adjusting differences in the to be accumulated over the course of Earned/incurred (E.I.) loss ratio = (Net
payment methods since insurance multiple fiscal years, and reversed during losses paid + Provision for reserve for
premiums can be paid monthly, annually the fiscal year in which a disaster occurs. outstanding losses + Loss adjustment
or in a lump sum, and by assuming that expenses) / Earned premiums (excluding
average payments will be made over the Combined ratio earthquake insurance and compulsory
term of the policy. The sum of a net loss ratio and net
automobile liability insurance) × 100.
expense ratio. Indicates an insurance
Assumed interest rate company s profitability in the primary Endowment insurance
Insurance companies anticipate a certain business operations. Endowment insurance entitles a benefi-
return on invested assets in advance ciary to receive death or serious disability
and discount insurance premiums only Compulsory automobile liability benefits upon the death or serious
by this amount. insurance disability of the insured within an insur-
This discount rate is called the Compulsory automobile liability insur-
ance period specified when the policy is
assumed interest rate. ance is legally required for all vehicles
purchased, or to receive maturity
and provides protection for victims of
benefits upon policy maturity.
Assumed mortality rate traffic accidents resulting in injury or
The mortality rate is the percentage of death. Compulsory automobile liability ERM (enterprise risk management)
people who die in a single year for a mutual aid is similar. With compulsory An approach to accomplishing corporate
given large population. The assumed automobile liability insurance (mutual strategic goals and sustainable growth in
mortality rate is the mortality rate used aid), indemnity payments per person per corporate value by conducting integrat-
when calculating the amount of insur- accident are capped at ¥30 million for ed recognition and control of all risks a
ance premiums needed to cover future death, ¥40 million for serious residual company faces and seeking to optimize
benefit payments, and represents a disability and ¥1.2 million for injury. the risk from a company-wide perspec-
projection of the number of deaths by Benefits are not paid for vehicle or tive.
gender and age based on past statistics. property damage.
ESR (economic solvency ratio)
Assumed rate of expense Contingency reserve ESR is one of the financial soundness
In operating their businesses, insurance Reserve to prepare for possible contin- indicators, which measures whether an
companies forecast their expenses, and gencies, including insurance risk and organization possesses sufficient capital
then incorporate this amount in their assumed interest rate risk. in relation to its risks.
insurance premiums. This expense rate Sony Life computes its ESR by
is called the assumed rate of expense. Core profit dividing MCEV by the risk amount based
An indicator of profits (losses) in the
on economic value. For details on MCEV
C primary insurance business over a
one-year period.
It is derived by subtracting from
and the risk amount based on economic
value, please see MCEV Results for
Capital adequacy ratio Sony Life in the Financial Data Book.
ordinary profit any profits earned from
The ratio of capital to total assets. An operations other than the primary
indicator of whether a bank has enough
EV (embedded value)
insurance business. Profit categories An indicator of the corporate value of a
capital, including common stock, versus subtracted from ordinary profit include life insurance company. Sony Life
credit risk assets (of total assets, those gains and losses on the sale of securities discloses MCEV (market consistent
which could become non-performing). If and one-time gains and losses, such as embedded value) in conformity with the
a bank is unable to recover a large profits from the sale of assets owned by MCEV Principles. For details on MCEV,
amount of loans, it can draw on capital the insurance company. please see MCEV Results for Sony Life
and write off these loans. A sharp
in the Financial Data Book.
decrease in capital creates difficulties in
bank management. D Expense ratio
Capital adequacy ratio regulations The ratio of expenses to insurance
ensure that banks are soundly managed Direct premiums written premiums. Used as an indicator of
by keeping the capital adequacy ratio Premiums received from policyholders,
calculated by subtracting direct surren- business efficiency at insurance compa-
above a certain level. This ratio is nies. Expenses are used for soliciting,
therefore an important indicator to show der payments and other direct payments
from direct premiums. maintaining and managing insurance as
financial soundness. For banks possess- well as for payment of insurance claims.
ing business bases overseas, the Duration
internationally standardized regulations
to preserve financial soundness are a
A sensitivity index indicating the extent
to which the present value of future cash
F
capital adequacy ratio of over 8%, and flow (interest income, repayment of Foreign currency-denominated
for banks not possessing business principal, receipt of premiums, payment insurance
bases overseas, in Japan a capital of insurance benefits and dividends, etc.) Insurance product in which insurance
adequacy ratio of 4% is required. from eligible assets (managed assets) premiums are invested in foreign curren-
and liabilities (policy liabilities) will be cy. Sony Life sells U.S.

dollar-denominated insurance, in which Even after submitting an insurance conduct. Through their outstanding
policyholders pay the Japanese yen policy application, no protection or client services, MDRT members are
equivalent of the U.S. dollar-denominat- compensation is provided unless recognized as leaders of the business
ed insurance premiums and select the premiums are paid. and local communities. They are also
Japanese yen or U.S. dollar when they internationally recognized as profession-
receive insurance claims. Investment crowd funding als in the life insurance and financial
Investment crowd funding is an arrange- services business.
Foundation internal ratings- ment that uses the Internet to link
based approach venture companies fund-raising needs
N
Strategy and Review

The amount of credit risk assets is calcu- for their projects with investors money
lated mainly by the standard approach management needs. Unlike dona-
or internal rating based approach for tion-type and purchase-type crowd Net fees and commissions
computing the capital adequacy ratio. funding, which do not involve monetary Fees and commissions charged for
The standard approach calculates the return, investors can receive dividends. providing services. These refer to income
amount of credit risk assets by using the Meanwhile, investment crowd funding generated by providing services, such as
risk weight set by authorities. On the has the feature of investment products bank transfer fees and investment trust
other hand, the internal rating based associated with risks, whereby dividends sales commissions, less the costs
approach calculates the amount of credit may not be paid or the investment value associated with providing these services.
risk assets by using the default rate, etc. may fall below the amount invested due Net interest income
as estimated internally by financial to the performance of venture compa- Net interest income accounts for the
institutions that practice advanced risk nies, etc. largest percentage of the four income

management. This approach includes a components of gross operating profit.
fundamental internal rating based
approach that partly uses the values set L Banks generally use the deposits
received from individuals and the funds
by authorities for loss rates at the time of Lapse and surrender rate raised in interbank markets to provide
for Creating Value

default, and an advanced internal rating Surrender refers to the cancellation of an loans to individuals and companies and
based approach that uses the values insurance policy at some point in the to invest in securities. Net interest
estimated internally by financial institu- future. Upon surrender, the policy is income is the difference between the
tions in every situation. terminated, and from that point protec- total interest received from loans and
tion or coverage is lost. On the other other items (interest income) and the
G hand, a lapse is when a policyholder fails
to pay premiums within the payment
total interest paid for deposits and other
items (interest expenses). Net interest
General accounts grace period, causing the policy to lapse, income is affected by changes in interest
Accounts for managing financial assets from which point the policy will no longer rates (e.g., if deposit interest rates rise
not included in separate accounts. This provide protection. while loan interest rates stay at the same
account guarantees policyholders a The lapse and surrender rate is the levels, net interest income will decrease),
certain assumed interest rate, while the ratio of lapses and surrenders to policies and by deposit and loan balances.
life insurance company bears the asset in force at the beginning of the fiscal
Net other operating income
Corporate Section
management risk. year. It is calculated by adding the total
of lapses and surrenders for the year in Net other operating income is derived
Gross operating profit question, and then dividing by the from services other than the primary
The total income from the four compo- amount of policies in force at the begin- banking services income categories of
nents of banking services income: net ning of the fiscal year. net interest income, net fees and
interest income, net fees and commis- commissions, and net trading income.
sions, net trading income and net other Living benefit insurance One example is buying and selling in dol-
operating income. Equivalent to gross This insurance provides a lump-sum lars and other foreign currencies. In this
profit (sales minus purchases) and an benefit payment when the insured is case, after purchasing foreign currency
indicator of the amount of profits a bank diagnosed with a disease such as one of at a certain price, any gain from a subse-
generates from its main services. the three major diseases (cancer, heart quent sale at a price higher than the
attack or stroke). purchase price would be recorded in
I Loss adjustment expenses
other operating income, and any loss
from a subsequent sale at a price lower
Expenses incurred by an insurance com- than the purchase price would be
Individual annuities pany in examining an insured event.
Policyholders are eligible for receiving recorded in other operating expenses.
These include personnel and non-per-
annuity payments from funds accumu- sonnel expenses. Net premiums written
Reference
lated by paid insurance premiums at a Premiums received directly from policy-

certain age prescribed in the policy. Loss ratio holders (direct premiums written),
There are a variety of types depending The ratio of insurance claims paid to pre- adjusting for reinsurance premiums (sub-
on the period for receiving the annuity, mium income. Used in analyzing the tracting reinsurance premiums paid and
structure of the annuity, method for business of an insurance company and adding direct reinsurance premiums
paying premiums and death protection in calculating insurance premium rates. received).
prior to receiving the annuity. The net loss ratio is the ratio derived by
adding loss adjustment expenses to net Non-performing assets
Individual variable annuities losses paid, then dividing by net premi- Non-performing assets are claims
Individual annuity product in which ums written. against parties in bankruptcy, claims
assets are invested mainly in stocks and against parties in effective bankruptcy
bonds, and annuity and surrender
payments increase or decrease depend- M due to poor business or other reasons,
and claims against parties at risk of
ing on investment returns. The individual bankruptcy. Non-performing assets also
policyholder bears the asset manage- MDRT (Million Dollar Round Table)
A global, independent association of the include loans for which principal or
ment risk. interest payments are past due by three
world s leading life insurance and
Insurance premiums financial services professionals with months or more, and loans for which
Money paid by policyholders to an 66,000 members from 72 countries and repayment on initial terms is impossible
insurance company based on the territories (as of August 2018). MDRT and interest has been reduced or
insurance policy. members demonstrate exceptional exempted and the repayment of princi-
professional knowledge and strict ethical pal has been extended.

Reference
O rates as the basis for calculating their

own insurance premium rates.
Standard Mortality Table
The Institute of Actuaries of Japan
Over-the-counter (OTC) sales of prepares a table that compiles data
Reinsurance including mortality rates and average life
insurance products at banks The insurance agreement that insurance
A bank serves as an insurance agency expectancies by gender and age. Of
companies conclude with domestic and these data, mortality rates are verified by
to solicit insurance. overseas reinsurance companies for the Commissioner of Financial Services
some of the insurance policies they
P underwrite in order to diversify risks on
insurance policies.
Agency of Japan, and then used as the
assumed mortality rates in calculating
standard policy reserves required under
Policy amount in force Reserve for outstanding claims the Insurance Business Act of Japan.
Total amount of protection provided by
life insurance companies to individual
(Reserve for outstanding losses) Standard yield
Reserve for the estimated amount of The standard yield is the calculating rate
policyholders. This is different from the
unfixed insurance payments and unpaid insurance companies are required to use
total amount of premiums paid by policy-
insurance claims at the end of the fiscal when accumulating policy reserves for
holders (premium income).
year, among payment obligations for future insurance payments.
Policy reserves insurance claims, surrender value and
(Underwriting reserves) other benefits. Surrender payments
Reserves that insurance companies Money refunded to the policyholder in
accumulate in advance, funded by
Reserve for price fluctuations the event that the insurance policy is
This reserve is set aside to prepare for surrendered or cancelled. Surrender
premiums, investment income, and other
losses caused by price fluctuations in payment amounts vary depending on
sources, to prepare for future liabilities
stocks, bonds and other assets held by several factors, including the type of
resulting from insurance policies, includ-
an insurance company. insurance, insurance period and years
ing payments of claims, annuities and
benefits. Riders elapsed.
Riders can enlarge the scope of protec-
Policy reserves and others
(Underwriting reserves) tion in the primary policy by adding
provisions to the primary coverage.
T
Reserves recorded in the liabilities
section of the balance sheets for which
Riders do not constitute a policy by Term insurance
themselves. Multiple riders can be added Term insurance entitles a beneficiary to
insurance companies are required in the
to the primary policy. Riders are can- receive benefits in the event of death or
Insurance Business Act of Japan to
celed when the primary policy is can- serious disability of the insured within an
accumulate to prepare for the payment
celed due to maturity, surrender or other insurance period specified when the
of future claims and other items to fulfill
reasons. policy is purchased.
their obligations for paying claims and
other actions based on insurance ROEV (return on embedded value)
policies. Policy reserves and others
include reserve for outstanding claims
ROEV is an indicator that refers to the
growth potential of corporate value. The
U
and policy reserves. amount of increase of EV (embedded Underwriting profit
value), an indicator of a life insurance Underwriting profit is calculated by
Policyholder loans company s corporate value, is deemed subtracting any underwriting expenses
As one of the asset management (net losses paid and loss adjustment
to be profit that takes into account the
operations of life insurance companies, expenses, etc.) and operating, general
unique aspects of life insurance account-
loans provided up to a certain level of and administrative expenses associated
ing.
the surrender payment on life insurance with underwriting from underwriting
Core ROEV is the growth rate of EV
policies. In general, policyholders retain income (net premiums written, etc.), then
that excludes any fluctuation effects of
insurance protection and rights to adding or subtracting other income and
the investment yield and discounted
receive dividends during the period of expenses (income taxes associated with
rate.
the policyholder loan. However, policy- compulsory automobile liability insur-
holder loans may not be available
depending on the type of insurance. S ance, etc.)
Policyholders dividend reserve

A reserve accumulated to fund dividend
Separate accounts
Separate accounts are used for variable
V
payments to policyholders pursuant to life insurance, variable annuities and Variable life insurance
the provisions of the Insurance Business other insurance products to invest Insurance product in which assets are
Act of Japan. assets separately from the other financial invested mainly in stocks and bonds,
assets owned by an insurance company and claims and surrender payments
Positive spread in order to pay investment returns increase or decrease depending on
The amount by which the actual invest- investment returns. The individual
directly to policyholders.
ment income is higher than the expected policyholder bears the asset manage-
investment income from the assumed Solvency margin ment risk. The minimum insurance
interest rate. The solvency margin indicates payment payment is guaranteed, regardless of
ability. Insurance companies accumulate investment performance.
R policy reserves to prepare for the
Reference loss cost rates

payment of future claims, allowing them
to adequately respond to risks within a W
Non-life insurance premium rates normally anticipated range. Whole life insurance
comprise net insurance premium rates However, unforeseen events can Insurance that pays benefits in the event
used for paying insurance claims and occur due to changes in the environment the insured dies or is disabled. Unlike
loading insurance premium rates used such as major disasters and substantial term life insurance, protection continues
for operating insurance businesses. Net declines in stock prices. The solvency for an entire life.
insurance premium rates calculated by margin ratio is one measure used by
the General Insurance Rating regulatory authorities to determine how
Organization of Japan are called much an insurance company is able to
reference loss cost rates. Member pay in response to the risk of such
insurers of the organization can use the unpredictable events.


Annual Report Sony 2019 PDF

Încărcat de

Informații document

Titlu original

Drepturi de autor

Formate disponibile

Partajați acest document

Partajați sau inserați document

Opțiuni de partajare

Vi se pare util acest document?

Este necorespunzător acest conținut?

Drepturi de autor:

Formate disponibile

Annual Report Sony 2019 PDF

Încărcat de

Drepturi de autor:

Formate disponibile

2019

1 Introduction 52 Corporate Section

SFH refers to Guidance for Collaborative Value Disclaimer

c Sony Financial Holdings Inc. Annual Report 2019

Create a sustainable society where people feel a sense of enrichment

Become the most trusted ﬁnancial services group by invoking

Customer First: Provide products and services that satisfy customers

Originality: Work actively and pursue creativity and innovation

Diversity: Create new value by harnessing diversity and varying

Sustainability: Fulﬁll our stakeholder responsibilities through

Sony Financial Group formulated its Mission, Vision & Values.

Sony Financial Holdings Inc. Annual Report 2019 1

It all began with the founder s dream

2 Sony Financial Holdings Inc. Annual Report 2019

Sony Financial Holdings Inc. Annual Report 2019 3

Business Volume KPI

Policy amount in force*1 Direct premiums written Retail balance*2

Financial Soundness Indicators

Solvency margin ratio Solvency margin ratio Capital adequacy ratio

2,590.5% 813.0% 9.58%

Consolidated adjusted ROE Core ROEV Adjusted ROE ROE

6.7% 6.4% 15.2% 7.3%

4 Sony Financial Holdings Inc. Annual Report 2019

Long-term issuer rating

Insurer financial Counterparty credit rating

*As of June 25, 2019

Consolidated 11,055 Sony Life

Sony Financial Holdings Inc. Annual Report 2019 5

6 Sony Financial Holdings Inc. Annual Report 2019

Let me express my deepest appreciation to all stakeholders for

Environmental changes that reshape

At present, environmental change is accelerating and advancing

Sony Financial Holdings Inc. Annual Report 2019 7

Based on this idea, our medium-term business plan foresees changes

8 Sony Financial Holdings Inc. Annual Report 2019

Building a stronger foundation for

It is also necessary for us to have a solid promotion and management

Sony Financial Holdings Inc. Annual Report 2019 9

The theme of our current medium-term business plan is to take on

10 Sony Financial Holdings Inc. Annual Report 2019

Contributing toward the development of a sustainable society

Corporate activities Enhance corporate value

Initiatives to create value through our business

Contribute to people s lives by offering

Support challenges oriented toward new Make lifestyles more convenient

P1 Sony Financial Group s Mission, Vision & Values

Sony Financial Holdings Inc. Annual Report 2019 11

Sony Financial Group

12 Sony Financial Holdings Inc. Annual Report 2019

In our medium-term business plan, in addition to organic growth achieved

Strategy and Review

IInitiatives to Strengthen Our Foundation

for Creating Value

Establishment of investment subsidiary

Progress Toward Fiscal 2020 Medium-term Targets

Actual Forecast Medium-term targets*1

Profit attributable to owners Above initial

*1 Medium-term targets announced on May 31, 2018

Sony Financial Holdings Inc. Annual Report 2019 13

Sony Financial Group

Consolidated Adjusted ROE

Consolidated adjusted ROE 6.7% Approx. 6% Approx. 7%

(Sone Life) Core ROEV 6.4% 5% – 6% 6% or more

Policy amount in force1 Direct premiums written Retail balance2

Policy Amount in Force1 Number of Lifeplanner MCEV3/Core ROEV*4 Ordinary Proﬁt